state of California
Comprehensive Annual
Financial Report
For the Fiscal Year Ended June 30, 2014
BETTY T. YEE
California State Controller’s Office
STATE OF CALIFORNIA
COMPREHENSIVE
ANNUAL
FINANCIAL REPORT
For the Fiscal Year Ended
June 30, 2014
Prepared by
The Office of the State Controller
BETTY T. YEE
California State Controller
Contents
INTRODUCTORY SECTION
California State Controller’s Transmittal Letter. iii
Certifieate of Aehievement for Exeellenee in Finaneial Reporting. ix
Prineipal Offieials of the State of California. x
Organization Chart of the State of California. xi
FINANCIAL SECTION
Independent Auditor’s Report. 2
Management’s Diseussion and Analysis. 5
BASIC FINANCIAL STATEMENTS
GOVERNMENT-WIDE FINANCIAL STATEMENTS
Statement of Net Position. 28
Statement of Aetivities. 32
FUND FINANCIAL STATEMENTS
Balanee Sheet - Governmental Funds. 36
Reeoneiliation of the Governmental Funds Balanee Sheet to
the Statement of Net Position. 38
Statement of Revenues, Expenditures, and Changes in Fund Balanees -
Governmental Funds. 40
Reeoneiliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of Governmental Funds to the Statement of Activities. 42
Statement of Net Position - Proprietary Funds. 44
Statement of Revenues, Expenses, and Changes in Fund Net Position - Proprietary Funds .... 48
Statement of Cash Flows - Proprietary Funds. 50
Statement of Fiduciary Net Position - Fiduciary Funds and Similar Component Units. 54
Statement of Changes in Fiduciary Net Position - Fiduciary Funds and
Similar Component Units. 55
DISCRETELY PRESENTED COMPONENT UNITS
FINANCIAL STATEMENTS
Statement of Net Position - Discretely Presented Component Units
Enterprise Activity. 58
Statement of Activities - Discretely Presented Component Units -
Enterprise Activity. 62
State of California Comprehensive Annual Financial Report
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Finaneial Statements - Index. 65
Notes to the Finaneial Statements. 69
REQUIRED SUPPLEMENTARY INFORMATION
Sehedule of Funding Progress. 142
Infrastructure Assets Using the Modified Approach. 143
Budgetary Comparison Schedule -
General Fund and Major Special Revenue Funds. 146
Reconciliation of Budgetary Basis Fund Balances of the General Fund and the
Major Special Revenue Funds to GAAP Basis Fund Balances. 149
Notes to the Required Supplementary Information. 149
COMBINING FINANCIAL STATEMENTS AND SCHEDULES -
NONMAJOR AND OTHER FUNDS
Nonmajor Governmental Funds. 155
Combining Balance Sheet. 158
Combining Statement of Revenues, Expenditures and Changes in Fund Balances. 162
Budgetary Comparison Schedule - Budgetary Basis. 166
Internal Service Funds. 167
Combining Statement of Net Position. 168
Combining Statement of Revenues, Expenses and Changes in Fund Net Position. 172
Combining Statement of Cash Flows. 174
Nonmajor Enterprise Funds. 179
Combining Statement of Net Position. 180
Combining Statement of Revenues, Expenses and Changes in Fund Net Position. 184
Combining Statement of Cash Flows. 186
Private Purpose Trust Funds.. 191
Combining Statement of Fiduciary Net Position. 192
Combining Statement of Changes in Fiduciary Net Position. 193
Fiduciary Funds and Similar Component Units - Pension and Other
Employee Benefit Trust Funds. 195
Combining Statement of Fiduciary Net Position. 198
Combining Statement of Changes in Fiduciary Net Position. 200
Contents
Agency Funds. 203
Combining Statement of Fiduciary Assets and Liabilities.204
Combining Statement of Changes in Fiduciary Assets and Liabilities.206
Nonmajor Component Units.209
Combining Statement of Net Position.210
Combining Statement of Activities.214
STATISTICAL SECTION
Financial Trends.219
Schedule of Net Position by Component.220
Schedule of Changes in Net Position.222
Schedule of Fund Balances - Governmental Funds. 226
Schedule of Changes in Fund Balances - Governmental Funds.228
Revenue Capacity.231
Schedule of Revenue Base.232
Schedule of Revenue Payers by Industry/Income Level.236
Schedule of Personal Income Tax Rates. 238
Debt Capacity.241
Schedule of Ratios of Outstanding Debt by Type.242
Schedule of Ratios of General Bonded Debt Outstanding.244
Schedule of General Obligation Bonds Outstanding.246
Schedule of Pledged Revenue Coverage.247
Demographic and Economic Information. 251
Schedule of Demographic and Economic Indicators.252
Schedule of Employment by Industry.254
Operating Information.255
Schedule of Full-Time Equivalent State Employees by Function. 256
Schedule of Operating Indicators by Function.258
Schedule of Capital Asset Statistics by Function.262
Acknowledgements.266
State of California Comprehensive Annual Financial Report
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Introductory Section
BETTY T. YEE
California State Controller
BETTY T. YEE
California State Controller
March 26, 2015
To the Citizens, Governor, and Members of the Legislature of the State of California:
I am pleased to submit the State of California Comprehensive Annual Financial Report (CAFR) for the
fiscal year ended June 30, 2014. This report meets the requirements of Government Code section 12460
for an annual report prepared strictly in accordance with accounting principles generally accepted in the
United States and contains information to help readers gain a reasonable understanding of the State’s
financial activities.
For the first time in five years, the State’s fiscal year ended with a positive net position of $7.3 billion for
tbe primary government. Overall, revenues exceeded expenses by $9.7 billion. On a cash basis, the State
also ended the fiscal year with a strong positive cash balance of $1.9 billion in the General Fund and
$1.1 billion in the Special Fund for Economic Uncertainties to meet General Fund cash needs.
California experienced a firm rebound in economic activity and success in efforts to rein in government
spending. The 2014-15 Budget, enacted on June 20, 2014, advances a multiyear plan that is balanced,
pays down budgetary debt from past years, saves for a rainy day, and makes wise investments in
education, the environment, public safety, infrastructure, and California’s extensive safety net.
Tbe preparation of this report would not have been possible without the skill, effort, and dedication of the
entire staff of the State Controller’s Office. I thank them and all government departments for their
assistance in providing the data necessary to prepare this report. Credit is also due to the California State
Auditor and her audit staff for their continued support for maintaining the highest standards of
professionalism in the management of the State’s finances.
The State Controller’s Office will continue to ensure the proper accounting and reporting of the State’s
fiscal resources, offer fiscal guidance to local governments, and uncover fraud and abuse of taxpayer
dollars.
Sincerely,
Original signed by:
BETTY T. YEE
California State Controller
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Report Overview
The State’s management assumes responsibility for the accuracy, completeness, and fairness of
information presented in the CAFR, including all disclosures, based upon a comprehensive
framework of internal controls established for this purpose. The internal control structure is designed
to provide reasonable, but not absolute, assurance that the financial statements are free of material
misstatements. The objective of these controls is to ensure compliance with legal provisions
embodied in the annual appropriated budget approved by the Legislature and Governor.
The California State Auditor has issued an unmodified opinion on the financial statements for the
year ended June 30, 2014, in accordance with auditing standards generally accepted in the United
States of America and Government Auditing Standards issued by the Comptroller General of the
United States.
The State of California also is required to undergo an annual single audit in conformity with the
provisions of the United States Office of Management and Budget’s Circular A-133, Audits of
States, Local Governments, and Non-Profit Organizations. This report is issued separately.
The Management’s Discussion and Analysis (MD&A) immediately follows the independent
auditor’s report and contains an introduction, overview, and analysis of the financial statements. The
MD&A also contains information regarding California’s economy for the year ending June 30, 2014,
and its economic performance as of January 31, 2015, for the 2014-15 fiscal year. The MD&A
complements this transmittal letter and should be read in conjunction with it.
Profile of the State of California
The State of California was admitted to the Union on September 9, 1850. The State’s population is
estimated for 2014 to be nearly 39 million residents. The State’s government is divided into three
branches: Executive, Legislative, and Judicial. Executive power is vested in the Governor. Other
members of the executive branch include the Eieutenant Governor, Attorney General, Secretary of
State, State Treasurer, State Controller, Insurance Commissioner, and the State Superintendent of
Public Instruction. All officers of the executive branch are elected to a four-year term. The
Eegislative branch of government is the State’s law-making authority and is made up of two houses:
the Senate and the Assembly. The Judicial branch is charged with interpreting the laws of the State of
California. It provides settlement of disputes between parties in controversy, determines the guilt or
i nn ocence of those accused of violating laws, and protects the rights of Californians.
California’s government includes control agencies that help to regulate internal governmental
operations. The State Controller’s Office, the State’s independent fiscal watchdog, ensures that the
State’s budget is spent properly, offers fiscal guidance to local governments, and uncovers fraud and
abuse of taxpayer dollars. The Department of Finance, part of the Executive branch of government,
establishes fiscal policies to carry out the State’s programs and serves as the Governor’s chief fiscal
policy advisor. The California State Auditor promotes the efficient and effective management of
public funds through independent evaluations of state and local governments.
The State of California provides a wide range of services to its citizens, including social, health, and
human services; kindergarten through 12th grades (K-12) and higher education; and business and
transportation, consumer services, general government, and correctional programs. The State is also
financially accountable for legally separate entities (component units) that provide post-secondary
education programs, promote agricultural activities and financial assistance to small business, and
finance coastal and inland urban waterfront restoration projects. These component units are
V
separately reported in the State’s finaneial statements. The State, through its related organizations
(organizations for which the primary government is not financially accountable), provides services
such as the operation of the statewide energy transmission grid; earthquake insurance for
homeowners and renters; workers’ compensation insurance; health insurance for individuals,
families, and employees of small businesses; financing for pollution control facilities, and for
acquiring, constructing, and equipping health facilities; and loans to students attending public and
private nonprofit colleges and universities. The financial information of these institutions is not
included in the State’s financial statements.
The State Legislature approves an annual budget that contains estimates of revenues and
expenditures for the ensuing fiscal year. This budget is the result of negotiations between the
Governor and the Legislature. The State Controller’s Office is statutorily responsible for controlling
revenues due to the primary government and for expenditures of each appropriation contained in the
budget. The State’s annual budget is submitted no later than January 10 preceding the beginning of
the fiscal year on July 1, and must be approved by the Legislature by June 15 each year. This annual
budget serves as the foundation for the State’s financial planning and control. Additional information
on the budgetary basis of accounting can be found in Note 2, Budgetary and Legal Compliance, and
in the Required Supplementary Information section of the CAFR that follows the Notes to the
Financial Statements.
Overview of the State’s Economy
The State of California is ranked first in population and third in land area in the U.S., and contains
some of the most renowned resources and riches in the world. It is home to the most productive
agricultural counties in the nation, with more than 80,000 farms and ranches contributing more than
$44 billion annually to its agricultural industry. California has the largest and most diverse natural
and cultural heritage of any state in the nation. In 2012, California’s national parks generated nearly
$1.5 billion in economic benefit to the State from visitor spending. California’s Gross Domestic
Product (GDP) makes up more than 13% of the United States’ total GDP and ranks eighth in the top
ten in the world economy. The five largest sectors of California’s economy in terms of jobs are retail
and wholesale trade; government; professional and business services; health care and social
assistance; and food services and hotels.
Budget Outlook
2014- 15 Fiscal Year
The 2014-15 Budget presents a multi-year balanced budget plan, maintains a $1.6 billion “rainy day”
reserve, pays down budgetary debt, and shores up the teachers’ pension system. Total resources
available, including General Fund revenues and transfers, are estimated to be $109.4 billion, with
estimated expenditures of $ 108 billion, resulting in a General Fund balance of $ 1.4 billion at the end
of the 2014-15 fiscal year.
2015- 16 Fiscal Year
The Governor released his proposed 2015-16 Budget on January 9, 2015, and sees maintaining a
balanced budget as an ongoing challenge for the long term, requiring both fiscal restraint and
prudence. The Budget proposes to end the fiscal year with $3.4 billion in total reserves, which
includes $2.8 billion in the Budget Stabilization Account and $534 million in the General Fund’s
traditional budget reserve. The Budget commits over $60 billion for K-12 and higher education, and
VI
an additional $1.2 billion for adult education, career technical education, workforce investment, and
apprenticeships. $1.1 billion is appropriated for the State’s flood protection, with an additional
$115 million for drought response. The Budget commits an additional $1.2 billion to pay off loans
and liabilities from Proposition 98; repays $1 billion in deferrals to schools and community colleges;
makes the final payment on $15 billion in Economic Recovery Bonds; and repays $533 million in
mandated reimbursements to local governments. The Budget begins to address $66 billion in
deferred maintenance needs related to the State’s infrastructure by appropriating $478 million for
critical deferred maintenance at universities and community colleges, state parks, prisons, hospitals,
and other state facilities.
Long-term Financial Planning
The following are some of the long-term financial planning initiatives that will impact the State’s
long-term financial goals.
• Proposition 98, approved by voters in November 1988, funds preschools, K-12 education,
community colleges, and other state education programs. The Proposition 98 guarantee
experienced volatility during the recent economic downturn, which led to significant and
damaging budget reductions. On November 4, 2014, voters approved Proposition 2—the
budget reserve and debt payment measure—which requires a deposit in the State Proposition
98 Rainy Day Fund under specified future conditions. The Governor’s 2015-16 Budget
provides $65.7 billion in total Proposition 98 funding, an increase of 4% from the revised
2014-15 Budget. This will increase the ongoing K-12 funding to $9,571 per student.
• The California Department of Transportation’s upcoming five-year Infrastructure Plan
estimates $26.6 billion, which includes investments in state transportation systems for
maintenance, preservation, and safety; and State Transportation Improvement Program projects,
which include expansion of capacity on highways and rail, both of which are vital to moving
passengers and freight.
• Proposition 1, approved by voters in November 2014 as the Water Quality, Supply, and
Infrastructure Improvement Act of 2014, provides $7.5 billion in general obligation bonds for
water storage, water quality, flood protection, and watershed protection and restoration
projects. The Bay Delta Conservation Plan (BDCP) estimates a total cost of $24.8 billion over a
50-year term to help secure California’s water supply, by building new water delivery
infrastructure and operating systems to improve the ecological health of the Delta. The BDCP
includes conservation measures to restore or protect approximately 145,000 acres of habitat,
provide more reliable water operations, and secure water supplies for 25 million Californians
and the agricultural industry.
• The California High-Speed Rail Authority is responsible for the development and construction
of a high-speed passenger train service between San Francisco and Fos Angeles/Anaheim, with
extensions to San Diego, Sacramento, and points in-between. In addition to 800 miles of rail
line, the system will include up to 24 stations, 150 miles of bridges, viaducts, and elevated
structures, 35 miles of tunnels, 610 grade separations, and 510,000 square yards of retaining
walls. When fully completed, the service will be accessible to more than 90% of the State’s
residents. The Authority assumes that $25.4 billion from various funds, including federal. Cap
and Trade, Proposition lA bond, and other sources will be available to help accomplish its
goals over the next five years.
Vll
• In 2014, the Governor signed a new funding plan to elose a $74 billion shortfall in teaehers’
pensions over the next three deeades. The 2015-16 Budget ineludes $1.4 billion to implement
the second year of the plan.
• The Governor is proposing a plan to address unfunded state retiree health care benefits. The
most recent valuation estimates an unfunded liability of $72 billion exists as of June 30, 2014.
Paying down the retiree health care unfunded liability is a shared responsibility between
employer and employees. The administration has indicated that, as collective bargaining
contracts expire, it will negotiate, with each bargaining unit, a plan to jointly fund retiree health
care benefits in the future.
Awards
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a
Certificate of Achievement for Excellence in Financial Reporting to the State of California for its
comprehensive annual financial report for the fiscal year ended June 30, 2013. In order to be
awarded a Certificate of Achievement, a government must publish an easily readable and efficiently
organized comprehensive annual financial report. This report must satisfy both generally accepted
accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current
comprehensive annual financial report continues to meet the Certificate of Achievement Program’s
requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.
Vlll
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
State of California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30,2013
Executive Director/CEO
State of California Comprehensive Annual Financial Report
Principal Officials of the State of California
Executive Branch
Edmund G. Brown, Jr.
Governor
Gavin Newsom
Lieutenant Governor
Betty T. Yee
State Controller
Kamala D. Harris
Attorney General
John Chiang
State Treasurer
Alex Padilla
Seeretary of State
Tom Torlakson
Superintendent of Pub lie Instruetion
Dave Jones
Insuranee Commissioner
Board of Equalization
George Runner, Member, First Distriet
Fiona Ma, Member, Seeond Distriet
Jerome E. Horton, Member, Third Distriet
Diane L. Harkey, Member, Fourth Distriet
Legislative Branch
Kevin de Leon
President pro Tempore, Senate
Toni G. Atkins
Speaker of the Assembly
Judicial Branch
Tani Cantil-Sakauye
Chief Justiee, State Supreme Court
California State Controller's Transmittal Letter
Organization Chart of the State of Caiifornia
XI
State of California Comprehensive Annual Financial Report
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Financial Section
state Auditor
Elaine M. Howie State Auditor
Doug Cordiner Chief Deputy
Independent Auditor's Report
THE GOVERNOR AND THE LEGISLATURE OF THE
STATE OF CALIFORNIA
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the
business-type activities, the aggregate discretely presented component units, each major fund, and
the aggregate remaining fund information of the State of California, as of and for the year ended
June 30, 2014, and the related notes to the financial statements, which collectively comprise the
State’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements
in accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the preparation
and fair presentation of financial statements that are free from material misstatement, whether due
to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We did
not audit the financial statements of the following:
Government-wide Financial Statements
• Certain enterprise funds that, in the aggregate, represent 79 percent of the assets and deferred
outflows, and 30 percent of the revenues of the business-type activities.
• The University of California and the California Housing Finance Agency that represent
93 percent of the assets and deferred outflows, and 93 percent of the revenues of the discretely
presented component units.
Fund Financial Statements
• The Safe Drinking Water State Revolving fund, that represents 15 percent of the assets and
deferred outflows, and 6 percent of the additions, revenues, and other financing sources of the
Environmental and Natural Resources fund, a major governmental fund.
• The following major enterprise funds: Electric Power fund. Water Resources fund. State Lottery
fund, and California State University fund.
• The Golden State Tobacco Securitization Corporation, the Public Building Construction,
the Public Employees’ Retirement, the State Teachers’ Retirement, the State Water Pollution
Control, and the 1943 Veterans Farm and Home Building funds, that represent 85 percent of
the assets and deferred outflows, and 58 percent of the additions, revenues and other financing
sources of the aggregate remaining fund information.
• The discretely presented component units noted above.
www.auditor.ca.gov
555 Capitol Mall, Suite 300
Sacramento, CA 95814
916.445.0255
916.327.0019 fax
The related financial statements were audited by other auditors whose reports have been furnished to us,
and our opinions, insofar as they relate to the amounts included for those funds and entities, are based
solely on the reports of the other auditors. We conducted our audit in accordance with auditing standards
generally accepted in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of the United States
of America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. The financial statements of
the Golden State Tobacco Securitization Corporation, the Public Building Construction, the Public
Employees’ Retirement, the State Lottery, the Water Resources, and the 1943 Veterans Farm and Home
Building funds were not audited in accordance with Government Auditing Standards.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial statements in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall presentation
of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
Opinions
In our opinion, based on our audit and the reports of other auditors, the financial statements referred
to above present fairly, in all material respects, the respective financial position of the governmental
activities, the business-type activities, the aggregate discretely presented component units, each major
fund, and the aggregate remaining fund information of the State of California, as of June 30, 2014, and
the respective changes in financial position and, where applicable, cash flows thereof for the year then
ended in accordance with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United State of America require that a discussion
and analysis by management, schedule of funding progress, infrastructure information, budgetary
comparison information, reconciliation of budgetary and GAAP-basis fund balances, and related
notes be presented to supplement the basic financial statements. Such information, although not
a part of the basic financial statements, is required by the Governmental Accounting Standards
Board which considers it to be an essential part of financial reporting for placing the basic financial
statements in an appropriate operational, economic, or historical context. We and the other auditors
have applied certain limited procedures to the required supplementary information in accordance with
auditing standards generally accepted in the United States of America, which consisted of inquiries
of management about the methods of preparing the information and comparing the information for
consistency with management’s responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an
opinion or provide any assurance on the information because the limited procedures do not provide
us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the finaneial statements that
collectively comprise the State’s basic financial statements. The introductory section, combining
financial statements, and statistical section are presented for purposes of additional analysis and are
not a required part of the basic financial statements.
The combining financial statements are the responsibility of management and were derived from,
and relate directly to the underlying accounting and other reeords used to prepare the basic financial
statements. Such information has been subjeeted to the auditing procedures applied in the audit of the
basic financial statements and certain additional procedures, including comparing and reconciling
such information directly to the underlying accounting and other records used to prepare the basie
financial statements or to the basic financial statements themselves, and other additional proeedures
in accordance with auditing standards generally accepted in the United States of America by us and
other auditors. In our opinion, based on our audit, the procedures performed as described above,
and the reports of other auditors, the combining financial statements are fairly stated, in all material
respects, in relation to the basic financial statements as a whole.
The introduetory and statistical sections have not been subjected to the auditing procedures applied
in the audit of the basic financial statements, and accordingly, we do not express an opinion or
provide any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
March 19, 2015 on our consideration of the State’s internal control over financial reporting and on our
tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements,
and other matters. The purpose of that report is to describe the scope of our testing of internal control
over financial reporting and compliance and the results of that testing, and not to provide an opinion
on internal control over financial reporting or on compliance. That report is an integral part of an
audit performed in accordance with Government Auditing Standards in considering the State’s internal
control over financial reporting and compliance.
CALIFORNIA STATE AUDITOR
JOHN F. COLLINS II, CPA
Deputy State Auditor
March 19, 2015
Management’s Discussion and Analysis
Management’s Discussion and Anaiysis
The following Management’s Diseussion and Analysis is required supplementary information to the State of
California’s finaneial statements. It deseribes and analyzes the finaneial position of the State, providing an
overview of the State’s aetivities for the year ended June 30, 2014. We eneourage readers to eonsider the
information we present here in eonjunetion with the information presented in the Controller’s letter of
transmittal at the front of this report and in the State’s finaneial statements and notes, which follow this
section.
Financial Highlights - Primary Government
Government-wide Highlights
California experienced a solid rebound in economic activity during the 2013-14 fiscal year and its financial
health is clearly on the mend. The State’s general revenues increased by $7.1 billion (6.0%) over the prior
year. Expenses for the State’s governmental activities also increased but were less than revenues received,
resulting in a $7.8 billion increase in the governmental activities’ net position and yielding the first positive
net position since the 2008-09 fiscal year. Total revenues and transfers for the State’s business-type activities
also surpassed expenses by $1.9 billion in fiscal year 2013-14.
Net Position - The primary government’s net position as of June 30, 2014, was $7.3 billion. The total net
position is reduced by $96.1 billion for net investment in capital assets and by $29.8 billion for restricted net
position, yielding a negative unrestricted net position of $118.6 billion. Restricted net position is dedicated for
specified uses and is not available to fund current activities. More than half of the negative $118.6 billion
consists of $66.7 billion in outstanding bonded debt issued to build capital assets for school districts and other
local governmental entities. The bonded debt reduces the unrestricted net position; however, local
governments, not the State, own the capital assets that would offset this reduction.
Fund Highlights
Governmental Funds - As of June 30, 2014, the primary government’s governmental funds reported a
combined ending fund balance of $19.8 billion, an increase of $8.1 billion over the prior fiscal year, as
restated. The unrestricted fund balance, comprised of committed, assigned, and unassigned balances, was
negative $5.1 billion. The nonspendable and restricted fund balances were $156 million and $24.7 billion,
respectively.
Proprietary Funds - As of June 30, 2014, the primary government’s proprietary funds reported a combined
ending net position of $5.9 billion, an increase of $1.7 billion over the prior fiscal year, as restated. The total
net position is reduced by $2.3 billion for net investment in capital assets, expendable restrictions of
$5.2 billion, and nonexpendable restrictions of $16 million, yielding a negative unrestricted net position of
$1.6 billion.
5
State of California Comprehensive Annual Financial Report
Noncurrent Assets and Liabilities
As of June 30, 2014, the primary government’s noneurrent assets totaled $145.4 billion, of whieh
$125.1 billion is related to eapital assets. State highway inffastrueture assets of $65.3 billion represent the
largest portion of the State’s eapital assets.
The primary government’s noneurrent liabilities totaled $161.0 billion, whieh eonsists of $79.9 billion in
general obligation bonds, $30.3 billion in revenue bonds, and $50.8 billion in remaining noneurrent liabilities.
During the 2013-14 fiscal year, the primary government’s noneurrent liabilities decreased by $3.3 billion
(2.0%) from the prior fiscal year. This decrease was primarily the result of a $4.4 billion decrease in capital
lease obligations, an increase of $3.2 billion in net other postemployment benefits obligations, a decrease of
$1.3 billion in revenue bonds payable, and a $952 million decrease in loans payable.
Overview of the Financial Statements
This discussion and analysis is an introduction to the section presenting the State’s basic financial statements,
which includes four components: (1) government-wide financial statements, (2) fund financial statements,
(3) discretely presented component units financial statements, and (4) notes to the financial statements. Thi s
report also contains required supplementary information and combining financial statements and schedules.
Government-wide Financial Statements
Government-wide financial statements are designed to provide readers with a broad overview of the State’s
finances. The government-wide financial statements do not include fiduciary programs and activities of the
primary government and component units because fiduciary resources are not available to support state
programs.
To help readers assess the State’s economic condition at the end of the fiscal year, the statements provide both
short-term and long-term information about the State’s financial position. These statements are prepared using
the economic resources measurement focus and the accrual basis of accounting, similar to methods used by
most businesses. These statements take into account all revenues and expenses connected with the fiscal year,
regardless of when the State received or paid the cash. The government-wide financial statements include two
statements: the Statement of Net Position and the Statement of Activities.
• The Statement of Net Position presents all of the State’s financial and capital resources in a format in
which assets and deferred outflows of resources equal liabilities and deferred inflows of resources, plus
net position. Over time, increases or decreases in net position indicate whether the financial position of
the State is improving or deteriorating.
• The Statement of Activities presents information showing how the State’s net position changed during the
most recent fiscal year. The State reports changes in net position as soon as the event giving rise to the
change occurs, regardless of the timing of the related cash flows. Thus, this statement reports revenues
and expenses for some items that will result in cash flows in future fiscal periods (e.g., uncollected taxes
and earned but unused vacation leave). This statement also presents a comparison between direct
expenses and program revenues for each function of the State.
6
Management’s Discussion and Analysis
The government-wide finaneial statements separate into different columns the three types of state programs
and activities: governmental activities, business-type activities, and component units.
• Governmental activities are mostly supported by taxes, such as personal income and sales and use taxes,
and intergovernmental revenues, primarily federal grants. Most services and expenses normally associated
with state government fall into this activity category, including general government, education (public
kindergarten through 12th grade [K-12] schools and institutions of higher education), health and human
services, resources, state and consumer services, business and transportation, correctional programs, and
interest on long-term debt.
• Business-type activities typically recover all or a significant portion of their costs through user fees and
charges to external users of goods and services. The business-type activities of the State of California
include providing unemployment insurance programs, providing housing loans to California veterans,
providing water to local water districts, providing services to California State University students, selling
California State Lottery tickets, and selling electric power. These activities are carried out with minimal
financial assistance from the governmental activities or general revenues of the State.
• Component units are organizations that are legally separate from the State, but are at the same time related
to the State financially (i.e., the State is financially accountable for them) or the nature of their
relationship with the State is so significant that their exclusion would cause the State’s financial
statements to be misleading or incomplete. The State’s financial statements include the information for
blended, fiduciary, and discretely presented component units.
• Blended component units, although legally separate entities, are in substance a part of the primary
government’s operations. Therefore, for reporting purposes, the State integrates data from blended
component units into the appropriate funds. The Golden State Tobacco Securitization Corporation and
certain building authorities are blended component units of the State and are included in
governmental activities.
• Fiduciary component units are legally separate from the primary government but, due to their
fiduciary nature, are included with the primary government’s fiduciary funds. The California Public
Employees’ Retirement System and the California State Teachers’ Retirement System are fiduciary
component units that are included with the State’s pension and other employee benefit trust funds,
which are not included in the government-wide financial statements.
• Discretely presented component units are legally separate from the primary government and provide
services to entities and individuals outside the primary government. The activities of discretely
presented component units are presented in a single column in the government-wide financial
statements.
Most component units prepare their own separately issued financial statements. For information regarding
obtaining the financial statements of the individual component units, refer to Note 1 A, Reporting Entity.
7
State of California Comprehensive Annual Financial Report
Fund Financial Statements
Fund financial statements are provided for governmental funds, proprietary funds, fiduciary funds and similar
component units, and discretely presented component units. A fund is a grouping of related accounts that is
used to maintain control over resources that have been segregated for specific activities or objectives. The
State of California, like other state and local governments, uses fund accounting to ensure and demonstrate
compliance with finance-related legal and contractual requirements. Following are general descriptions of the
three types of funds:
• Governmental funds are used to account for essentially the same functions that are reported as
governmental activities in the government-wide financial statements. However, unlike the
government-wide financial statements, governmental fund financial statements focus on short-term
inflows and outflows of spendable resources, as well as on balances of spendable resources available at
the end of the fiscal year. Such information may be useful in evaluating a government’s short-term
financing requirements. This approach is known as the flow of current financial resources measurement
focus and the modified accrual basis of accounting. These governmental fund statements provide a
detailed short-term view of the State’s finances, enabling readers to determine whether adequate financial
resources exist to meet the State’s current needs.
Because governmental fund financial statements provide a narrower focus than do government-wide
financial statements, it is useful to compare governmental fund statements to the governmental activities
information presented in the government-wide financial statements. By doing so, readers may better
understand the long-term impact of the government’s short-term financing decisions. Reconciliations
located on the pages immediately following the fund statements show the differences between the
government-wide statements and the governmental fund Balance Sheet and the governmental fund
Statement of Revenues, Expenditures, and Changes in Fund Balances. Primary differences between the
government-wide and fund statements relate to noncurrent assets, such as land and buildings, and
noncurrent liabilities, such as bonded debt and amounts owed for compensated absences and capital lease
obligations, which are reported in the government-wide statements but not in the fund-based statements.
• Proprietary funds show activities that operate more like those found in the private sector. The State of
California has two proprietary fund types: enterprise funds and internal service funds.
• Enterprise funds record activities for which a fee is charged to external users; they are presented as
business-type activities in the government-wide financial statements.
• Internal service funds accumulate and allocate costs internally among the State of California’s various
functions. For example, internal service funds provide public building construction, information
technology, printing, fleet management, and architectural services primarily for state departments. As
a result, their activity is considered governmental.
• Fiduciary funds account for resources held for the benefit of parties outside the State. Fiduciary funds and
the activities of fiduciary component units are not reflected in the government-wide financial statements
because the resources of these funds are not available to support State of California programs. The
accounting used for fiduciary funds and similar component units is similar to that used for proprietary
funds.
8
Management’s Discussion and Analysis
Discretely Presented Component Units Financial Statements
The State has financial accountability for discretely presented component units, which have certain
independent qualities and operate in a similar manner as private-sector businesses. The activities of the
discretely presented component units are classified as enterprise activities.
Notes to the Financial Statements
The notes to the financial statements in this publication provide additional information that is essential for a
full understanding of the data provided in the government-wide and fund financial statements. The notes to
the financial statements, which describe particular accounts in more detail, are located immediately following
the discretely presented component units’ financial statements.
Required Supplementary Information
A section of required supplementary information follows the notes to the basic financial statements in this
publication. This section includes a schedule of funding progress for certain pension and other
postemployment benefit trust funds, information on infrastructure assets based on the modified approach, a
budgetary comparison schedule, and a reconciliation of the budgetary basis and the GAAP basis fund
balances for the major governmental funds presented in the governmental fund financial statements.
Combining Financial Statements and Schedules
The Combining Financial Statements and Schedules - Nonmajor and Other Funds section presents combining
statements that provide separate financial statements for nonmajor governmental funds, nonmajor proprietary
funds, fiduciary funds, and nonmajor component units. The basic financial statements present only summary
information for these activities.
Government-wide Financial Analysis
Net Position
The primary government’s combined net position (governmental and business-type activities) increased by
more than 409%, from a negative $2.4 billion, as restated at June 30, 2013, to a positive $7.3 billion a year
later.
The primary government’s $96.1 billion net investment in capital assets, such as land, buildings, equipment,
and infrastructure (roads, bridges, and other immovable assets) comprise a significant portion of its net
position. This amount of capital assets is net of any outstanding debt used to acquire those assets. The State
uses capital assets when providing services to citizens; consequently, these assets are not available for future
spending. Although the State’s investment in capital assets is reported net of related debt, the resources needed
to repay this debt must come from other sources because the State cannot use the capital assets to pay off the
liabilities.
Another $29.8 billion of the primary government’s net position represents resources that are externally
restricted as to how they may be used, such as resources pledged to debt service. Internally imposed
earmarking of resources is not presented in this publication as restricted net position. As of June 30, 2014,
governmental activities reported an unrestricted net deficit of $116.9 billion and business-type activities
showed an unrestricted net deficit of $ 1.7 billion.
9
State of California Comprehensive Annual Financial Report
A large portion of the unrestricted net deficit of governmental activities consists of $66.7 billion in
outstanding bonded debt issued to build capital assets for school districts and other local governmental
entities. Because the State does not own these capital assets, neither the assets nor the related bonded debt is
included in the portion of net position reported as “net investment in capital assets.” Instead, the bonded debt
is reported as a noncurrent liability that increases the State’s unrestricted net position deficit. The State can
expect continued deficits in the unrestricted net position of governmental activities as long as it has significant
outstanding obligations for school districts and other local governmental entities.
Table 1 presents condensed financial information derived from the Statement of Net Position for the primary
government.
Table 1
Net Position - Primary Government
June 30, 2014 and 2013
(amounts in millions)
Governmental Activities Business-type Activities_Total
2014
2013
2014
2013
2014
2013
ASSETS
Current and other assets .
.. $
70,798
$
55,358
$
24,345
$
34,996
$
95,143
$
90,354
Capital assets .
116,369
108,668
8,735
9,959
125,104
118,627
Total assets.
187,167
164,026
33,080
44,955
220,247
208,981
DEFERRED OUTFLOWS
OF RESOURCES.
986
911
242
480
1,228
1,391
Total assets and deferred
outflows of resources.
... $
188,153
$
164,937
$
33,322
$
45,435
$
221,475
$
210,372
LIABILITIES
Noncurrent liabilities .
... $
137,522
$
128,052
$
23,506
$
36,282
$
161,028
$
164,334
Other liabilities .
48,456
44,863
3,676
4,616
52,132
49,479
Total liabilities.
185,978
172,915
27,182
40,898
213,160
213,813
DEFERRED INFLOWS
OF RESOURCES.
171
159
823
471
994
630
Total liabilities and deferred
inflows of resources.
186,149
173,074
28,005
41,369
214,154
214,443
NET POSITION
Net investment in capital assets .
94,001
84,931
2,066
1,719
96,067
86,650
Restricted .
24,951
24,316
4,913
5,172
29,864
29,488
Unrestricted.
(116,948)
(117,384)
(1,662)
(2,825)
(118,610)
(120,209)
Total net position (deficit).
2,004
(8,137)
5,317
4,066
7,321
(4,071)
Total liabilities, deferred inflows
of resources, and net position..
... $
188,153
$
164,937
$
33,322
$
45,435
$
221,475
$
210,372
Changes in Net Position
The expenses of the primary government totaled $237.1 billion for the year ended June 30, 2014. Of this
amount, $120.5 billion (50.8%) was funded with program revenues (charges for services or program-specific
grants and contributions), leaving $116.6 billion to be funded with general revenues (mainly taxes). The
primary government’s general revenues of $126.3 billion exceeded net unfunded expenses by $9.7 billion,
resulting in a positive net position for the first time in five years.
10
Management’s Discussion and Analysis
Table 2 presents eondensed fmaneial information derived from the Statement of Aetivities for the primary
government.
Table 2
Changes in Net Position - Primary Government
Years ended June 30, 2014 and 2013
(amounts in millions)
Governmental Activities Business-type Activities_Total
2014
2013
2014
2013
2014
2013
REVENUES
Program Revenues:
Charges for services.
., $ 22,274 $
23,102 $
25,284 $
28,379 $
47,558 $
51,481
Operating grants and contributions.
69,861
60,944
1,491
1,323
71,352
62,267
Capital grants and contributions.
1,516
1,669
81
142
1,597
1,811
General Revenues:
Taxes .
125,812
118,645
—
—
125,812
118,645
Investment and interest.
81
57
—
—
81
57
Miscellaneous.
488
552
—
—
488
552
Total revenues.
220,032
204,969
26,856
29,844
246,888
234,813
EXPENSES
Program Expenses:
General government.
14,292
15,390
—
—
14,292
15,390
Education.
54,720
50,586
—
—
54,720
50,586
Health and human services.
105,037
94,070
—
—
105,037
94,070
Resources.
5,855
5,671
—
—
5,855
5,671
State and consumer services.
590
1,475
—
—
590
1,475
Business and transportation.
13,427
12,836
—
—
13,427
12,836
Correctional programs.
11,235
10,082
—
—
11,235
10,082
Interest on long-term debt.
4,699
4,350
—
—
4,699
4,350
Electric Power.
—
—
835
488
835
488
Water Resources.
—
—
983
1,127
983
1,127
Public Buildings Construction.
—
—
—
410
—
410
State Lottery.
—
—
5,079
4,499
5,079
4,499
Unemployment Programs.
—
—
13,673
17,599
13,673
17,599
California State University.
—
—
6,545
6,197
6,545
6,197
Other enterprise programs.
—
—
143
140
143
140
Total expenses.
209,855
194,460
27,258
30,460
237,113
224,920
Excess (deficiency) before transfers ..
10,177
10,509
(402)
(616)
9,775
9,893
Transfers.
(2,296)
(1,998)
2,296
1,998
—
—
Special item.
(55)
—
(27)
—
(82)
—
Change in net position.
7,826
8,511
1,867
1,382
9,693
9,893
Net position, beginning (restated).
(5,822)
(16,648)
3,450
2,684
(2,372)
(13,964)
Net position (deficits), ending.
$ 2,004 $
(8,137) $
5,317 $
4,066 $
7,321 $
(4,071)
Governmental Activities
Governmental aetivities’ expenses, transfers, and a speeial item totaled $212.2 billion. Program revenues
totaling $93.7 billion, ineluding $71.4 billion reeeived in federal grants, funded 44.1% of expenses and
transfers, leaving $118.5 billion to be funded with general revenues (mainly taxes). General revenues for
governmental aetivities totaled $126.3 billion, and the governmental aetivities’ total restated net defieit
11
State of California Comprehensive Annual Financial Report
position of $5.8 billion at the end of fiscal year 2012-13 improved to a positive net position of $2.0 billion for
the year ended June 30, 2014, an increase of $7.8 billion (134.4%).
Chart 1 presents a comparison of governmental activities’ expenses by program, with related revenues.
Chart 1
Expenses and Program Revenues - Governmental Activities
Year ended June 30, 2014
(amounts in billions)
□ Program Revenues □ Expenses
For the year ended June 30, 2014, total state tax revenues collected for governmental activities increased by
$6.6 billion (5.8%) over the prior year. Personal income taxes increased by $1.3 billion (1.9%) as a result of
California’s stronger job market; the continued effect of Proposition 30, which increased personal income tax
on earnings above $250,000; increased capital gains taxes from a strong stock market; and increasing home
prices. Sales and use tax revenue increased by $2.6 billion (7.8%) due to the 0.25% increase in the State’s
sales tax effective on January 1, 2013, and increased consumer spending caused by increased consumer
confidence in the improving economy and a reduction in the unemployment rate. Corporate taxes increased by
$1.8 billion (24.9%) due to the State’s ongoing economic recovery as well as the passage of Proposition 39,
which required multistate corporations to calculate their California income tax liability on the percentage of
their sales in California.
Overall expenses for governmental activities increased by $15.4 billion (7.9%) over the prior year. The largest
increase of expenditures, $11.0 billion (11.7%), occurred in health and human services programs, the majority
of which is attributable to the Department of Health Care Services, which administers the State’s Medi-Cal
program. The growth in spending for health and humans services was due to an increased Medi-Cal caseload,
the increased utilization of health care services, the rising costs of those services, and the added costs
associated with implementing the Patient Protection and Affordable Care Act—also known as federal health
care reform. State and consumer services expenses decreased by $886 million (60.0%) largely due to the shift
of certain state and consumer services expenses to general government as a result of the Governor’s
Reorganization Plan No. 2.
12
Management’s Discussion and Analysis
Charts 2 and 3 present the percentage of total expenses for each governmental activities program and the
percentage of total revenues hy source.
Chart 2
Chart 3
Expenses by Program
Year ended June 30, 2014
(as a percent)
Revenues by Source
Year ended June 30, 2014
(as a percent)
Other revenue
9 . 6 %
Business-type Activities
Business-type activities’ expenses totaled $27.3 hillion. Program revenues of $26.9 hillion, primarily
generated from charges for services, and $2.3 hillion in transfers were sufficient to cover these expenses.
Consequently, the husiness-type activities’ total net position increased hy $1.9 hillion, or 54.1%, during the
year ended June 30, 2014.
Chart 4 presents a two-year comparison of the expenses of the State’s husiness-type activities.
Chart 4
Expenses - Business-type Activities - Two-year Comparison
Year ended June 30, 2014 and 2013
(amounts in billions)
State Lottery
Electric Power
Unemployment Programs
California State University
Other enterprise programs
|5.L
|4.5
~~1 0.8
Zr 0.5 ;
1 13.7
1
n 6.6
1 6.2
11-1 :
1 1.7 '
-^^-
17.6
$0 S3 $6 $9 $12 $15 $18
n 2014 n 2013
13
State of California Comprehensive Annual Financial Report
Fund Financial Analysis
The State’s governmental funds had an $8.1 hillion increase in fund balance over the prior year’s restated
ending fund balance. Proprietary funds’ net position increased by $1.9 hillion for the fiscal year 2013-14, of
which $1.5 billion was in the Unemployment Programs Fund, reducing its net position deficit to $2.7 hillion.
Governmental Funds
The governmental funds’ Balance Sheet reported $74.3 billion in assets, $54.6 billion in liabilities and
deferred inflows of resources, and $19.8 billion in fund balance as of June 30, 2014. Total assets of
governmental funds increased by 15.8%, while total liabilities increased by 5.1%, resulting in a total fund
balance increase of $8.1 billion (69.2%) over the prior fiscal year.
Within the governmental funds’ total fund balance, $156 million is classified as nonspendable because this
amount consists of long-term interfund receivables and loans receivable, or due to legal or contractual
requirements. Additionally, $24.7 billion is classified as restricted for specific programs by external
constraints such as debt covenants and contractual obligations, or by constitutional provisions or enabling
legislation. Furthermore, of the total fund balance, $3.0 billion is classified as committed for specific purposes
and $19 million is classified as assigned for specific purposes. The unassigned balance of the governmental
funds is a negative $8.1 hillion.
The Statement of Revenues, Expenditures and Changes in Fund Balances of the governmental funds reported
$219.9 hillion in revenues, $218.3 billion in expenditures, and a net $6.6 hillion in receipts from other
financing sources. The ending fund balance of the governmental funds for the year ended June 30, 2014, was
$19.8 billion, an $8.1 billion increase over the prior year’s restated ending fund balance of $11.7 billion. The
primary reason for the increase in fund balance was an increase in the year-end balances of cash reserves and
receivables, primarily from tax revenue and federal grants.
Personal income taxes, which account for 54.6% of tax revenues and 31.3% of total governmental fund
revenues, increased by $1.3 billion over the prior fiscal year. Sales and use taxes, which account for 28.9% of
tax revenues and 16.6% of total governmental fund revenues, increased by $2.5 billion over the prior fiscal
year. Corporation taxes, which account for 7.3% of tax revenues and 4.2% of total governmental fund
revenues, increased by $2.0 billion over the prior fiscal year. Governmental fund expenditures increased by
$16.2 billion over the prior fiscal year, primarily for education and health and human services. General
obligation bonds and commercial paper of $5.1 billion were issued during the 2013-14 fiscal year, an increase
of $ 1.0 billion over the prior fiscal year.
The State’s major governmental funds are the General Fund, the Federal Fund, the Transportation Fund, and
the Environmental and Natural Resources Eund. The General Eund ended the fiscal year with a fund deficit of
$7.4 billion. The Eederal Eund, the Transportation Eund, and the Environmental and Natural Resources Eund
ended the fiscal year with fund balances of $212 million, $7.5 billion, and $7.6 billion, respectively. The
nonmajor governmental funds ended the fiscal year with a total fund balance of $11.9 hillion.
General Fund: As shown on the Balance Sheet, the General Eund (the State’s main operating fund) ended the
fiscal year with assets of $19.4 billion; liabilities and deferred inflows of resources of $26.9 billion; and
nonspendable, restricted, and committed fund balances of $129 million, $394 million, and $125 million,
respectively, leaving the General Eund with a negative unassigned fund balance of $8.1 billion. Total assets of
the General Eund increased by $3.8 billion (24.1%) over the prior fiscal year, while the total liabilities and
deferred inflows of resources of the General Eund decreased by $3.0 billion (10.2%). Total net fund deficit
balance decreased by $7.6 hillion (50.6%).
14
Management’s Discussion and Analysis
As shown on the Statement of Revenues, Expenditures, and Changes in Fund Balanees, the General Fund had
an exeess of revenues over expenditures of $8.9 billion ($104.2 billion in revenues and $95.3 billion in
expenditures). Approximately 95.1% of General Fund revenue ($99.1 billion) is derived from the State’s
largest three taxes—personal income taxes ($67.6 billion), sales and use taxes ($22.3 billion), and corporation
taxes ($9.2 billion). As a result of fund classifications made to comply with governmental accounting
standards, a total of $244 million in revenue, essentially all from unemployment programs, is included in the
General Fund. These revenues are not considered General Fund revenues for any budgetary purposes or for
the State’s Budgetary/Fegal Basis Annual Report.
During the 2013-14 fiscal year, total General Fund revenue increased by $4.8 billion (4.8%). The increase is a
result of increases in corporation taxes of $2.0 billion (27.3%), sales and use taxes of $ 1.9 billion (9.1 %), and
personal income taxes of $1.4 billion (2.1%).
General Fund expenditures increased by $5.2 billion (5.8%). The largest increases were in education and
health and human services expenditures, which were up $3.9 billion and $961 million, respectively.
The General Fund’s defict for the year ended June 30, 2014, was $7.4 billion, a decrease of $7.6 billion from
the prior year’s restated ending fund deficit of $15.1 billion.
Federal Fund: This fund reports federal grant revenues and related expenditures to support the grant
programs. The largest of these programs is for health and human services, which accounted for $58.1 billion
(82.4%) of the total $70.5 billion in Federal Fund expenditures. The Medical Assistance program and the
Temporary Assistance for Needy Families program are included in this program area. Education programs
also constituted a large part of the Federal Fund expenditures, amounting to $6.9 billion (9.8%). The Federal
Fund’s revenue increased by $8.8 billion, which was approximately the same amount of the increase in
combined expenditures and transfers, resulting in only a $14 million fund balance increase from the prior
year’s ending fund balance of $198 million.
Transportation Fund: This fund accounts for fuel taxes, bond proceeds, and other revenues used primarily for
highway and passenger rail maintenance and construction. The Transportation Fund’s revenues increased by
7.0% and expenditures increased by 10.4%. Other financing sources provided net receipts of $2.2 billion. The
Transportation Fund ended the fiscal year with a $7.5 billion fund balance, an increase of $236 million over
the prior year.
Environmental and Natural Resources Fund: This fund accounts for fees, bond proceeds, and other revenues
that are used for maintaining the State’s natural resources and improving the environmental quality of its air,
land, and water. Other financing sources provided net receipts of $640 million. The Environmental and
Natural Resources Fund ended the fiscal year with a $7.6 billion fund balance, a decrease of $187 million
(2.4%) from the prior year.
Proprietary Funds
During the fiscal year, the Public Buildings Construction Fund was reclassified from an enterprise fund to an
internal service fund, causing restated beginning net positions and large differences in lease receivables,
revenue bonds payable, and related revenues and expenses for both fund types.
Enterprise Eunds: The total net position of the enterprise funds at June 30, 2014, was $5.3 billion—
$1.9 billion greater than the prior year’s restated ending net position of $3.4 billion. The Unemployment
Programs Fund had a decrease in its deficit net position of $1.5 billion, while the California State University
Fund and nonmajor enterprise funds increased their net positions by $264 million and $111 million,
respectively.
15
State of California Comprehensive Annual Financial Report
As shown on the Statement of Net Position of proprietary funds, total assets and deferred outflows of
resources of the enterprise funds was $33.7 billion as of June 30, 2014. Of this amount, current assets totaled
$11.2 billion, noncurrent assets totaled $22.3 billion, and deferred outflows of resources totaled $242 million.
The total liabilities and deferred inflows of resources of the enterprise funds was $28.4 billion. The largest
liabilities of the enterprise funds are $13.0 billion of revenue bonds payable and $7.6 billion of noncurrent
loans payable. During the 2013-14 fiscal year, the State reduced the balance of the loans from the U.S
Department of Labor that covered prior year deficits in the Unemployment Programs Fund, by $952 million,
leaving a balance of $7.6 billion as of June 30, 2014.
Total net position consisted of four segments: net investment in capital assets of $2.1 billion, a nonexpendable
restricted net position of $16 million, a restricted expendable net position of $4.9 billion, and an unrestricted
net deficit of $1.7 billion.
As shown on the Statement of Revenues, Expenses, and Changes in Fund Net Position of proprietary funds,
the enterprise funds ended the year with operating revenues of $24.2 billion, operating expenses of
$24.7 billion, and net revenues from other transactions of $49 million. The largest sources of operating
revenue were unemployment and disability insurance receipts of $15.2 billion in the Unemployment Programs
Fund, and lottery ticket sales of $5.0 billion collected by the State Lottery Fund. The unemployment and
disability insurance receipts in the Unemployment Programs Fund decreased by $3.4 billion from
$18.6 billion in the prior fiscal year. These receipts came primarily from the federal government
unemployment account to pay unemployment and disability benefits. The largest operating expenses were
distributions of $13.4 billion to beneficiaries by the Unemployment Programs Fund, and personal services of
$4.0 billion by the California State University Fund.
Internal Service Funds: The total net position of the internal service funds was $547 million as of
June 30, 2014. The net position consists of three segments: net investment in capital assets of $245 million,
restricted net position of $287 million, and unrestricted net position of $ 15 million.
Fiduciary Funds
The State of California has four types of fiduciary funds: private purpose trust funds, pension and other
employee benefit trust funds, investment trust funds, and agency funds. The private purpose trust funds ended
the fiscal year with net position of $6.1 billion. The pension and other employee benefit trust funds ended the
fiscal year with net position of $510.2 billion. The State’s only investment trust fund, the Local Agency
Investment Fund, ended the fiscal year with net position of $21.1 billion. Agency funds act as clearing
accounts and thus do not have a net position.
For the year ended June 30, 2014, the fiduciary funds’ combined net position was $537.5 billion, a
$67.9 billion increase over the prior year net position. The net position increased primarily because
contributions received and investment income in pension and other employee benefit trust funds exceeded
payments made to participants.
General Fund Budget Highlights
The original General Fund budget of $95.3 billion was increased by $4.1 billion. This increase is mainly
comprised of funding augmentations for health and human services, education, and correctional programs.
The increase in health and human services program funding is primarily due to the implementation of the
Patient Protection and Affordable Care Act, as well as caseload increases and augmentations for program
contingencies. The Proposition 98 minimum guarantee increased education funding as the result of increased
General Fund revenue in the 2013-14 fiscal year. The augmentation of correctional programs was authorized
by the California Community Corrections Perfomance Incentive Act for the purpose of providing
16
Management’s Discussion and Analysis
probation-failure-reduction incentive payments and high-performance grants. During fiscal year 2013-14, the
General Fund actual budgetary basis expenditures were $98.0 billion, or $1.4 billion less than the final
budgeted amount of $99.4 billion.
Table 3 presents a summary of the General Fund original and final budgets.
Table 3
General Fund Original and Final Budgets
Year ended June 30, 2014
(amounts in millions)
Original
Final
Increase
Budgeted amounts
State and consumer services.
. $
14
$
14
$
—
Business and transportation.
91
91
Resources.
1,109
1,263
154
Health and human services.
27,518
29,390
1,872
Correctional programs.
8,610
9,349
739
Education.
48,409
49,570
1,161
General government:
Tax relief.
422
425
3
Debt service.
4,801
4,801
—
Other general government.
4,328
4,478
150
Total.
. $
95,302
$
99,381
$
4,079
Capital Assets and Debt Administration
Capital Assets
The State’s investment in capital assets for its governmental and business-type activities as of June 30, 2014,
amounted to $125.1 billion (net of accumulated depreciation/amortization). The State’s capital assets include
land, state highway infrastructure, collections, buildings and other depreciable property, intangible assets, and
construction in progress. The buildings and other depreciable property account includes buildings,
improvements other than buildings, equipment, certain infrastructure assets, certain books, and other
capitalized and depreciable property. Intangible assets include computer software, land use rights, patents,
copyrights, and trademarks. Infrastructure assets are items that normally are immovable, such as roads and
bridges, and can be preserved for a greater number of years than can most capital assets.
As of June 30, 2014, the State’s capital assets increased $6.5 billion over the prior fiscal year. The majority of
this increase occurred in buildings and other depreciable property, and construction in progress. Included in
the capital assets increase is a $2.2 billion beginning balance restatement, primarily for understated state
highway infrastructure construction in progress.
Note 7, Capital Assets, includes additional information on the State’s capital assets.
17
State of California Comprehensive Annual Financial Report
Table 4 presents a summary of the primary government’s capital assets for governmental and business-type
activities.
Table 4
Capital Assets
June 30, 2014
(amounts in millions)
Governmental
Business-type
Activities
Activities
Total
Land.
. $ 18,258
$ 222 $
18,480
State highway infrastructure.
. 65,269
—
65,269
Collections - nondepreciable.
. 23
7
30
Buildings and other depreciable property.
. 27,554
11,738
39,292
Intangible assets - amortizable.
. 1,091
336
1,427
Less: accumulated depreciation/amortization.
. (12,150)
(4,581)
(16,731)
Construction in progress.
. 14,858
764
15,622
Intangible assets - nonamortizable.
. 1,466
249
1,715
Total. $ 116,369 $_ 8,735 $ 125,104
Modified Approach for infrastructure Assets
The State has elected to use the modified approach for capitalizing infrastructure assets of the state highway
system (state roadways and bridges). Under the modified approach, the State does not report depreciation
expense for its roads and bridges but capitalizes all costs that add to their capacity and efficiency. All
maintenance and preservation costs are expensed and not capitalized. Under the modified approach, the State
maintains an asset management system to demonstrate that the infrastructure is preserved at or above
established condition levels. During the 2013-14 fiscal year, the actual amount spent on preservation was
29.6% of the estimated budgeted amount needed to maintain the infrastructure assets at the established
condition levels. Although the amount spent fell short of the budgeted amount, the assessed condition of the
State’s bridges and roadways is better than the established condition baselines. The State is responsible for
maintaining 49,718 lane miles and 13,120 bridges.
The Required Supplementary Information includes additional information on how the State uses the modified
approach for infrastructure assets; it also presents the established condition standards, condition assessments,
and preservation costs.
Debt Administration
The State’s largest long-term obligations are its bonded debt. At June 30, 2014, the primary government had
total bonded debt outstanding of $115.9 billion. Of this amount, $84.0 billion (72.5%) represents general
obligation bonds, which are backed by the full faith and credit of the State. Included in the $84.0 billion of
general obligation bonds is $4.6 billion of Economic Recovery bonds that are secured by a pledge of revenues
derived from dedicated sales and use taxes. The current portion of general obligation bonds outstanding is
$4.0 billion and the long-term portion is $80.0 billion. The remaining $31.9 billion (27.5%) of bonded debt
outstanding represents revenue bonds, which are secured solely by specified revenue sources. The current
portion of revenue bonds outstanding is $1.6 billion and the long-term portion is $30.3 billion. During the
fiscal year, the State issued $5.9 billion in new general obligation bonds for transportation projects, housing
18
Management’s Discussion and Analysis
and emergency shelters, stem cell research, children’s hospitals, various water and flood control projects, and
to refund previously outstanding general obligation bonds and commercial paper.
Table 5 presents a summary of all the primary government’s long-term obligations for governmental and
business-type activities.
Table 5
Long-term Obligations
June 30, 2014
(amounts in millions)
Governmental Business-type
Activities
Activities
Total
Government-wide noncurrent liabilities
General obligation bonds.
. $ 79,287 $
617 $
79,904
Revenue bonds payable.
. 18,270
12,070
30,340
Net other postemployment benefits obligation.
. 18,617
628
19,245
Mandated cost claims payable.
. 7,715
—
7,715
Loans payable.
. —
7,633
7,633
Compensated absences payable.
. 3,751
183
3,934
Workers compensation benefits payable.
. 3,291
3
3,294
Net pension obligation.
. 3,238
—
3,238
Capital lease obligations.
. 200
1,180
1,380
Certificates of participation and commercial paper.
. 589
51
640
Other noncurrent liabilities.
. 2,563
1,141
3,704
Total noncurrent liabilities .
. 137,521
23,506
161,027
Current portion of long-term obligations.
. 5,807
1,931
7,738
Total long-term obligations .
. $ 143,328 $
25,437 $
168,765
During the year ended June 30, 2014, the primary government’s total long-term obligations increased by
$2.9 billion over the prior year’s restated balance. The prior year balance was restated primarily for the
elimination of the governmental activities’ capital lease obligation for lease-purchase agreements between the
State Public Works Board, and governmental funds when the Public Buildings Construction Fund was
reclassified from an enterprise fund (business-type activity) to an internal service fund (governmental
activity). Net other postemployment benefits obligation increased the most ($3.2 billion) during the fiscal
year, but other notable increases occurred in state-mandated cost claims payable ($1.1 billion) and general
obligation bonds payable ($717 million). The net other postemployment benefits obligation increased because
the State does not fully fund the annual cost of these benefits. The largest decreases were in revenue bonds
payable ($1.4 billion) and loans payable to the U.S. Department of Labor for prior year shortfalls in the
unemployment program ($952 million).
Note 10, Long-term Obligations, and Notes 11 through 16 include additional information on the State’s
long-term obligations.
In August 2013, Fitch raised the State’s general obligation rating to “A” from “A-”, citing the State’s
institutional changes to fiscal management and its ongoing economic and revenue recovery. In June 2014,
Moody’s raised the State’s general obligation rating to “Aa3” from “Al”, citing the State’s rapidly improving
financial position, high but declining debt metrics, adjusted net pension liability ratios that are close to the
state median, strong liquidity, and robust employment growth. During the 2013-14 fiscal year, the rating from
Standard and Poor’s remained unchanged at “A”.
19
State of California Comprehensive Annual Financial Report
Economic Condition and Future Budgets
The Economy for the Year Ending June 30,2014
The U.S. economy completed its fifth year of recovery as California ended its fiscal year on June 30, 2014.
National economic growth was somewhat erratic, with a difficult winter quarter followed hy a solid spring
rehound. The U.S. real gross domestic product (GDP) had a moderate 2.5% increase over the 12 months
spanning the State’s fiscal year.
California’s income growth outperformed the nation in the 2013-14 fiscal year. The State’s total personal
income increased 3.5% during the fiscal year versus the 2.6% increase the nation experienced. As personal
income grew, consumer spending increased, as substantiated hy the 6.6% increase in auto registrations, for a
total of 1.7 million registered vehicles for the 12 months ended June 30, 2014.
The State’s real estate market showed signs of stabilizing at the end of the fiscal year compared to the market
a year earlier, in which it was common for multiple offers to be made on a property and for it to be sold for
more than its list price. As of June 2014, prices were significantly higher, 6.6% over the prior year, but sales
were down by about 5%. Homebuilding in California picked up substantially, as permits issued during the
fiscal year increased approximately 12%, to more than 82,000 units. Similarly, nonresidential building
rebounded during the fiscal year; the value of nonresidential permits increased 44% to $23 billion. Retail
stores, hotels, amusement parks, offices, and renovations contributed to the large increase.
California’s job market both illustrated the State’s recovery and contributed to it during the fiscal year. In
June 2014, nonfarm employment surpassed its pre-recession high. With a 12-month gain of 347,500 jobs,
employment was 2.3% higher than in June 2013. Job growth was widespread, with notable increases in
construction, trade, leisure and hospitality, health care, and business and public services. Financial services,
nondurable goods manufacturing, and the federal government were the only areas that experienced job losses.
The improvement in the labor market was demonstrated by the drop in the State’s unemployment rate from
9.0% in June 2013 to 7.4% in June 2014.
California ended the 2013-14 fiscal year with impressive economic gains. Consumers benefited from gains in
jobs, personal income, home prices, and the stock market. California’s economic and financial health was
clearly on the mend even though the unemployment rate remained relatively high at the end of the fiscal year.
Economic Performance for the 2014-15 Fiscal Year as of January 31,2015
California’s economy continued to improve during the first several months of fiscal year 2014-15. Job gains,
falling unemployment, increases in personal income, higher auto sales, and rising construction in both the
residential and nonresidential markets demonstrate the continuing economic recovery.
Employment gains averaged 30,000 jobs per month during the first six months of the fiscal year, and as of
December 2014, nonfarm employment increased 2.3% over its June 2014 level. Job increases were spread
across a wide array of industries and sectors, and by December 2014, 11 of California’s major metropolitan
areas (representing 36% of the State’s total labor market) had returned to their pre-recession job peaks.
California’s unemployment rate continued to fall during the first six months of the 2014-15 fiscal year; by
December 2014, it had receded to 7.0% from 7.4% in June 2014.
The State began the first quarter of the new fiscal year with a solid gain of 3.9% in total personal income
compared with the prior quarter. Job gains, personal income increases, and low interest rates, spurred a 9%
20
Management’s Discussion and Analysis
increase in new auto registrations during the first four months of the fiscal year over the same period in the
prior fiscal year.
The housing market returned to a more normal and sustainable pace as of December 2014. The stabilizing of
home prices in recent months put home prices a moderate 3% above their prior year level as of
December 2014. Although December’s year-over-year rise in home sales was just 0.6%, it was the first
increase in nearly a year and a half.
New construction activity continued to advance. On the housing front, building permits during the first six
months of the 2014-15 fiscal year increased 5.7% over the total recorded during the first half of the prior
fiscal year. The value of nonresidential permits gained 8.3%, with solid increases in industrial, office, retail,
hotel, and building improvements.
California continues to make particular strides in technology, as evidenced by the advances of California
businesses in web applications, biotech, mobile devices, alternative energy, and environmental science.
During the first few months of the 2014-15 fiscal year, the State attracted $12.9 billion of venture capital,
representing more than half of the national total.
As California moves into the remaining months of the 2014-15 fiscal year, it appears well positioned for
further economic gains. Although challenged by an ongoing drought, economic and other instabilities abroad,
and continuing budget pressures, the State’s economy is clearly making progress on many fronts. The
expected further growth in technology, health care, tourism, business and professional services, and
construction all promise to deepen and broaden the State’s economic expansion.
California’s 2014-15 Budget
California’s 2014-15 Budget Act was enacted on June 20, 2014. The Budget Act appropriated $156.3 billion:
$108.0 billion from the General Fund, $44.3 billion from special funds, and $4.0 billion from bond funds. The
General Fund’s budgeted expenditures increased $7.3 billion (7.2%) over last year’s General Fund budget and
included a $1.6 billion supplemental payment to pay off the remaining balance of the State’s prior deficit
financing bonds, known as Economic Recovery bonds. The General Fund’s available resources were projected
to be $105.5 billion, after a projected $1.6 billion transfer to the Budget Stabilization Account (Rainy Day
Fund). General Fund revenue comes predominantly from taxes, with personal income taxes expected to
provide 65.6% of total revenue. California’s major taxes (personal income, sales and use, and corporation
taxes) are projected to supply approximately 96.2% of the General Fund’s resources in the 2014-15 fiscal
year.
The 2014-15 budget continued the Governor’s multi-year financial plan for the State of California, and for the
third consecutive year, it projected a surplus in the General Fund. The 2014-15 fiscal year is projected to end
with $2.1 billion in total reserves—$1.6 billion in the Budget Stabilization Account and $449 million reserved
for economic uncertainties. The 2014-15 budget made targeted augmentations in a few key areas while paying
down several billion dollars of existing liabilities, including the Economic Recovery bonds mentioned above.
Budget-related legislation was enacted to erase the California State Teachers’ Retirement System’ (CalSTRS)
$74 billion unfunded liability in 32 years by increasing contributions from the State, school and community
college districts, and teachers. The State is responsible for approximately $20 billion of the unfunded liability.
The 2014-15 budget provided $1.5 billion in state contributions to CalSTRS, of which $59 million will be
used toward reducing the State’s share of the unfunded liability.
21
State of California Comprehensive Annual Financial Report
The 2014-15 budget ineluded an inerease of $2.6 billion over the prior year revised estimate, to $60.9 billion,
for the minimum annual funding guarantee for schools and community colleges (Proposition 98 funding). The
budget also provided $5.2 billion to reduce the Proposition 98 funding deferrals accumulated in prior years,
leaving a balance of $992 million by the end of the 2014-15 fiscal year. However, this balance may be fully
eliminated if, in the May 2015 budget revision, the minimum guarantee for fiscal years 2013-14 and 2014-15
is higher than assumed in the 2014-15 budget package.
The spending plan for fiscal year 2014-15 includes General Fund money for health programs of $19.3 billion,
which is an increase of almost $700 million, or 3.7%, over the 2013-14 funding level. This increase primarily
addresses increased Medi-Cal program costs due to the implementation of the Patient Protection and
Affordable Care Act, as well as increases in caseload and the need for health care services. It is estimated that
approximately 825,000 additional people who were previously eligible for Medi-Cal, but who were
unenrolled, will receive benefits during the 2014-15 fiscal year under the current 50-50 state-federal cost
sharing arrangement.
General Fund revenues and expenditures tend to peak in different months, and the State typically experiences
spending in excess of revenues during the first several months of the fiscal year. During the 2014-15 fiscal
year, this gap has been significantly smaller than projected in the 2014-15 budget. As of December 1, 2014,
revenues were $1.3 billion more than forecasted, while total disbursements were $1.3 billion below estimates.
As a result, the General Fund’s increase in temporary borrowing was $2.7 billion less than projected, leaving a
balance of $18.5 billion in short-term borrowing—$15.7 billion of internal borrowing from other state funds
and $2.8 billion from revenue anticipation notes issued in September 2014.
California’s 2015-16 Budget
The Governor released his proposed 2015-16 budget on January 9, 2015; he sees maintaining a balanced
budget as an ongoing challenge for the long term, requiring both fiscal restraint and prudence. The budget
assumes the continued moderate expansion of the economy, and continues with the Governor’s multi-year
plan to build reserves and pay down outstanding debt. Proposition 2 was approved by voters in
November 2014 and affects the budget for the first time in fiscal year 2015-16. Proposition 2 gives the State
an opportunity to avoid budget shortfalls that are driven by ongoing spending commitments based on
temporary spikes in revenues from capital gains. Under Proposition 2, spikes in capital gains will instead be
used to save money for the next recession and to pay down the State’s debts and unfunded liabilities. The
budget proposes total reserves of $3.4 billion by the end of the 2015-16 fiscal year—$2.8 billion in the Budget
Stabilization Account required under Proposition 2 and $534 million in the General Fund’s reserve for
economic uncertainties. In addition to the required reserve. Proposition 2 requires an equivalent amount be
used to pay down existing debts. During the 2015-16 fiscal year, the Governor proposes to pay down the
General Fund’s loans from special funds and Proposition 98 obligations by a total of $1.2 billion.
The 2015-16 Governor’s Budget projects that General Fund revenues and transfers will be $113.4 billion and
expenditures will be $113.3 billion, with an estimated $1.5 billion year-end balance, which includes the
$534 million reserve. In the proposed budget, the General Fund began fiscal year 2014-15 with a surplus
balance of $5.1 billion; it is projected to begin fiscal year 2015-16 with a surplus of approximately
$1.4 billion. Estimated General Fund revenues and transfers are 4.9% more than the revised 2014-15 estimate
of $108.0 billion, while the 2014-15 expenditures are 1.4% greater than the revised 2014-15 estimate of
$111.7 billion.
Personal income tax is projected to increase by $3.5 billion (4.9%) over the prior year revised estimate. Thi s
represents a major component of the $5.0 billion General Fund revenue increase. Sales and use taxes are also
projected to increase by $1.7 billion (7.4%) and corporation tax by $0.6 billion (5.8%). The budget’s projected
increases in General Fund revenue trigger higher education spending through the Proposition 98 minimum
22
Management’s Discussion and Analysis
funding guarantees for both the 2014-15 and 2015-16 fiseal years. The Governor’s budget ineludes
$7.8 billion in Proposition 98 funding increases, with a large portion of new funding ($5.0 billion) dedicated
to implementation of the Local Control Funding Formula (LCFF), a package of workforce education and
training initiatives, and various community college augmentations. The Governor’s budget package also
provides $2.8 billion to significantly reduce the State’s outstanding Proposition 98 obligations (including
eliminating all remaining school and community college payment deferrals and reducing the backlog of
education mandate claims).
The Governor’s budget for fiscal year 2014-15 assumes increased spending for health and human services of
$1.4 billion, or 4.7%, mainly within the Medi-Cal program. The increase will ensure continued
implementation of federal health care reform, which will enable millions of Californians to obtain health care
coverage. Numerous recent federal actions in the health and human services area have increased State costs or
created substantial fiscal uncertainty. Therefore, assumptions made in the 2014-15 budget could ultimately
turn out differently and result in either additional costs or budget savings. The 2014-15 proposed budget
provides additional funding to resources and environmental protection programs for flood prevention, water
projects, drought-related activities, and greenhouse-gas-emissions reduction. The budget also proposes a small
one-time allocation to address some of the State’s $66 billion infrastructure deferred maintenance backlog.
According to the Legislative Analyst’s Office (LAO), California’s nonpartisan fiscal and policy advisor, the
Governor’s plan is reasonable—dedicating most new ongoing funding to the State’s high-priority program
needs and most one-time funding to paying off outstanding obligations. The LAO indicates that there is a
strong possibility that revenues for the 2014-15 fiscal year will be significantly above the Governor’s
projections, which will result in even more funding in fiscal year 2014-15 for schools and community colleges
under the Proposition 98 minimum funding guarantee, and could result in higher ongoing payments to
schools. As further evidence of the improvement in the State’s finances in recent years, the Governor’s cash
flow projections assume that the State will not need to issue a revenue anticipation note (RAN) to meet cash
flow needs during 2015-16. If the projections hold, fiscal year 2015-16 would be only the second year since
the mid-1980s that the State has not issued a RAN. However, LAO cautions that this level of peak revenue
will likely not last, and that the higher current-year revenue and resulting increase in ongoing school
spending, present a potential challenge for the State’s 2015-16 budget and beyond.
Future Changes in Pension Pian Reporting
The Governmental Accounting Standards Board (GASB) recently issued Statement No. 67, No. 68, and
No. 71 amending accounting and financial reporting standards for defined benefit and defined contribution
pension plans for employers and pension plan sponsors nationwide. The initial phase of the implementation
was completed by the State’s pension plan sponsors—the California Public Employees’ Retirement System
(CalPERS) and the California State Teachers’ Retirement System (CalSTRS). Both CalPERS and CalSTRS
prepared financial statements for the fiscal year ended June 30, 2014, in conformity with GASB Statement
No. 67. The next phase of implementation requires additional actuarial and accounting information to be
reported in the State of California’s Comprehensive Annual Financial Report (CAFR) for the fiscal year
ending June 30, 2015, in conformity with GASB Statements No. 68 and No. 71; this one-year lag is allowable
in the new standards. Therefore, the disclosure in Note 24, Pension Trusts and the Schedule of Funding
Progress included in the required supplementary information in this year’s CAFR is largely the same as the
previous years’ information, but next year it will be significantly different.
The effect of the new standards’ implementation is arguably the largest accounting and financial reporting
change to state and local governments nationwide in over a decade. However, the economic and budgetary
impact of the change is expected to be minimal. The State will be presenting new accounting information,
note disclosures, and required supplementary information as a result of the implementation.
23
State of California Comprehensive Annual Financial Report
There are four major ehanges that will occur in the State’s CAFR for the fiscal year ending June 30, 2015:
• The State’s net pension liability (NPL) will be presented in the government-wide Statement of Net
Position. The NPL consists of the fair value of the State’s investments in CalPERS’ pension plans, less
current payables and the total pension liability attributable to the State’s workforce for services rendered
to the date of valuation. An additional liability will be reported for the State’s obligations to CalSTRS’
pension plans in accordance with the provisions of the California Education Code.
• The State’s pension expense reported in the government-wide Statement of Activities will reflect the
change in the pension obligation that occurred during the fiscal year. Pension expense will be comprised
of the pensionable service cost of current employees, as adjusted for investment return and amortization
of various prior gains and losses, as well as other demographic and plan changes.
• The notes to the financial statements related to pension trusts will be revised to include new required
disclosures including information from the pension plans’ actuarial valuations and from other sources. In
most instances, the information will be from the previous year as recommended by the new standards.
• The required supplementary information related to pension plans will dramatically change. The Schedule
of Funding Progress will be discontinued and the information required by the new standards will grow to
include sets of ten-year schedules.
The accounting changes needed to implement GASB Statement No. 68 and No. 71 will require the
restatement of the beginning net position in the government-wide financial statements as of July 1, 2014. The
amount of this restatement is currently being calculated.
The State’s timely and successful implementation of GASB’s new pension plan standards is the result of an
intensive and collaborative effort by officials of the State’s pension plan sponsors (CalPERS and CalSTRS),
the State Controller’s Office, and the California State Auditor’s Office.
Requests for Information
The State Controller’s Office designed this financial report to provide interested parties with a general
overview of the State of California’s finances. Address questions concerning the information provided in this
report or requests for additional information through email to the State Controller’s Office, Division of
Accounting and Reporting at StateGovReports@sco.ca.gov. This report is also available on the State
Controller’s Office website at www.sco.ca.gov.
24
Basic Financial
Statements
State of California Comprehensive Annual Financial Report
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26
Government-wide
Financial Statements
State of California Comprehensive Annual Financial Report
Statement of Net Position
June 30, 2014
(amounts in thousands)
Primary Government
Governmental
Activities
Business-type
Activities
Total
Component
Units
ASSETS
Current assets:
Cash and pooled investments.
... $ 26,565,130
$ 5,433,555
$ 31,998,685
$ 2,353,088
Amount on deposit with U.S. Treasury.
—
25,215
25,215
—
Investments.
634,223
2,530,307
3,164,530
5,222,524
Restricted assets:
Cash and pooled investments.
3,339,603
676,975
4,016,578
128,517
Investments.
—
—
—
15,929
Due from other governments.
—
20,182
20,182
—
Net investment in direct financing leases.
100,829
11,442
112,271
—
Receivables (net).
16,404,305
1,970,482
18,374,787
3,787,272
Internal balances.
(329,500)
329,500
—
—
Due from primary government.
—
—
—
206,341
Due from other governments.
16,372,910
285,990
16,658,900
97,342
Prepaid items.
124,378
48,396
172,774
1,276
Inventories.
76,700
15,813
92,513
194,615
Recoverable power costs (net).
—
156,000
156,000
—
Other current assets.
98,740
5,304
104,044
255,168
Total current assets.
63,387,318
11,509,161
74,896,479
12,262,072
Noncurrent assets:
Restricted assets:
Cash and pooled investments.
402,394
711,814
1,114,208
26,725
Investments.
—
372,388
372,388
14,286
Loans receivable.
—
305,278
305,278
—
Investments.
—
1,178,561
1,178,561
27,930,558
Net investment in direct financing leases.
851,240
358,915
1,210,155
—
Receivables (net).
2,058,389
286,011
2,344,400
2,741,342
Loans receivable.
4,076,416
3,879,070
7,955,486
4,067,009
Recoverable power costs (net).
—
4,490,000
4,490,000
—
Long-term prepaid charges.
21,885
1,230,632
1,252,517
—
Capital assets:
Land.
18,258,395
222,138
18,480,533
1,002,521
State highway infrastructure.
65,268,686
—
65,268,686
—
Collections - nondepreciable.
22,630
7,711
30,341
390,678
Buildings and other depreciable property.
27,553,863
11,738,198
39,292,061
43,499,890
Intangible assets - amortizable.
1,090,970
336,051
1,427,021
835,971
Less: accumulated depreciation/amortization.
(12,150,010)
(4,581,349)
(16,731,359)
(20,542,756)
Construction in progress.
14,857,774
764,065
15,621,839
3,661,522
Intangible assets - nonamortizable.
1,466,407
248,601
1,715,008
5,082
Other noncurrent assets.
—
23,173
23,173
353,936
Total noncurrent assets .
123,779,039
21,571,257
145,350,296
63,986,764
Total assets.
187,166,357
33,080,418
220,246,775
76,248,836
DEFERRED OUTFLOWS OF RESOURCES.
986,477
242,167
1,228,644
3,737,238
Total assets and deferred outflows
of resources.
.. $ 188,152,834
$ 33,322,585
$ 221,475,419
$ 79,986,074
28
The notes to the financial statements are an integral part of this statement.
Government-wide Financial Statements
Primary Government
Governmental
Business-type
Component
Activities
Activities
Total
Units
LIABILITIES
Current liabilities:
Accounts payable.
.. $ 25,731,972
$ 313,160
$ 26,045,132
$ 1,838,598
Due to component units.
206,341
—
206,341
—
Due to other governments.
7,111,861
129,160
7,241,021
54,967
Revenues received in advance.
1,395,296
322,669
1,717,965
1,127,716
Tax overpayments.
4,872,567
—
4,872,567
—
Deposits.
396,868
—
396,868
790,051
Contracts and notes payable.
615
—
615
16,326
Unclaimed property liability.
730,564
—
730,564
—
Interest payable.
1,292,513
72,632
1,365,145
60,934
Securities lending obligations.
—
—
—
1,269,083
Benefits payable.
—
482,396
482,396
—
Current portion of long-term obligations.
5,807,107
1,930,899
7,738,006
3,805,538
Other current liabilities.
910,628
424,932
1,335,560
1,821,788
Total current liabilities.
48,456,332
3,675,848
52,132,180
10,785,001
Noncurrent liabilities:
Loans payable.
—
7,633,391
7,633,391
—
Lottery prizes and annuities.
—
683,180
683,180
—
Compensated absences payable.
3,750,543
182,859
3,933,402
275,284
Workers compensation benefits payable.
3,290,898
2,538
3,293,436
321,338
Certificates of participation, commercial paper,
and other borrowings.
589,575
51,106
640,681
20,255
Capital lease obligations.
200,192
1,180,232
1,380,424
448,648
General obligation bonds payable.
79,287,287
617,317
79,904,604
—
Revenue bonds payable.
18,270,478
12,069,907
30,340,385
19,187,901
Mandated cost claims payable.
7,715,179
—
7,715,179
—
Net other postemployment benefits obligation.
18,616,859
628,422
19,245,281
8,580,247
Net pension obligation.
3,237,785
—
3,237,785
7,725,075
Revenues received in advance.
—
11,460
11,460
—
Other noncurrent liabilities.
2,562,633
446,048
3,008,681
1,924,267
Total noncurrent liabilities.
137,521,429
23,506,460
161,027,889
38,483,015
Total liabilities.
185,977,761
27,182,308
213,160,069
49,268,016
DEFERRED INFLOWS OF RESOURCES.
170,802
822,886
993,688
7,110,123
Total liabilities and deferred inflows
of resources.
.. $ 186,148,563
$ 28,005,194
$ 214,153,757
$ 56,378,139
(continued)
The notes to the financial statements are an integral part of this statement.
29
State of California Comprehensive Annual Financial Report
Statement of Net Position (continued)
June 30, 2014
(amounts in thousands)
Primary Government
Governmental
Aetivities
Business-type
Aetivities
Total
Component
Units
NET POSITION
Net investment in capital assets.
. $ 94,001,659
$ 2,065,550
$
96,067,209
$ 12,682,963
Restricted:
Nonexpendable - endowments.
. —
16,219
16,219
5,289,548
Expendable:
Endowments and gifts.
. —
—
—
9,912,926
Business and transportation.
10,350,504
6,683
10,357,187
—
Resources.
4,946,088
569,826
5,515,914
—
Health and human services.
3,762,680
146,192
3,908,872
—
Education.
1,141,458
79,018
1,220,476
1,708,757
General government.
. 3,946,835
251,141
4,197,976
—
Unemployment programs.
. —
3,800,470
3,800,470
—
State and consumer services.
801,248
32,133
833,381
—
Correctional programs.
. 1,927
11,851
13,778
—
Indenture.
. —
—
—
491,187
Statute .
. —
—
—
1,268,261
Other purposes.
. .
—
—
25,769
Total expendable.
24,950,740
4,897,314
29,848,054
13,406,900
Unrestricted.
(116,948,128)
(1,661,692)
(118,609,820)
(7,771,476)
Total net position.
2,004,271
5,317,391
7,321,662
23,607,935
Total liabilities, deferred inflows of
resonrces, and net position.
. $ 188,152,834
$ 33,322,585
$
221,475,419
$ 79,986,074
(concluded)
30
The notes to the financial statements are an integral part of this statement.
Government-wide Financial Statements
This page intentionally left blank
The notes to the financial statements are an integral part of this statement.
31
State of California Comprehensive Annual Financial Report
Statement of Activities
Year Ended June 30, 2014
(amounts in thousands) _ Program Revenues
FUNCTIONS/PROGRAMS
Expenses
Charges
for Services
Operating
Grants and
Contributions
Capital
Grants and
Contributions
Primary government
Governmental activities:
General government.
. $
14,292,179
$
5,994,608
$
1,011,594
$
—
Education.
54,719,677
67,165
6,943,619
—
Health and human services.
105,037,102
7,961,897
58,943,872
—
Resources.
5,854,685
3,403,524
261,832
—
State and consumer services.
589,715
586,055
5,358
—
Business and transportation.
13,427,229
4,247,258
2,606,718
1,515,890
Correctional programs.
11,234,705
13,645
88,137
—
Interest on long-term debt.
4,699,265
—
—
—
Total governmental activities.
209,854,557
22,274,152
69,861,130
1,515,890
Business-type activities:
Electric Power.
835,000
835,000
—
—
Water Resources.
983,048
983,048
—
—
State Lottery.
5,078,935
5,077,976
—
—
Unemployment Programs .
13,673,403
15,167,258
—
—
California State University.
6,544,936
3,014,030
1,491,559
—
High Technology Education.
847
424
—
—
State Water Pollution Control Revolving.
5,072
62,985
—
80,903
Housing Loan.
57,206
65,247
—
—
Other enterprise programs.
79,641
77,671
—
—
Total business-type activities.
27,258,088
25,283,639
1,491,559
80,903
Total primary government.
. $
237,112,645
$
47,557,791
$
71,352,689
$
1,596,793
Component Units
University of California.
28,714,112
16,945,088
8,051,387
473,464
California Housing Finance Agency.
235,164
38,783
53,462
—
Nonmajor component units.
2,017,379
1,069,909
564,519
9,147
Total component units.
.... $
30,966,655
$
18,053,780
$
8,669,368
$
482,611
General revenues:
Personal income taxes
Sales and use taxes.
Corporation taxes.
Motor vehicle excise tax.
Insurance taxes.
Other taxes.
Investment and interest.
Escheat.
Other.
Transfers.
Special item - Loss on early extinguishment of debt
Total general revenues and transfers.
Change in net position.
Net position (deficit) - beginning, restated..
Net position - ending.
32
The notes to the financial statements are an integral part of this statement.
Government-wide Financial Statements
Net (Expenses) Revenues and Changes in Net Position
Primary Government
Governmental
Business-type
Activities
Activities
Total
$ (7,285,977)
$ (7,285,977)
(47,708,893)
(47,708,893)
(38,131,333)
(38,131,333)
(2,189,329)
(2,189,329)
1,698
1,698
(5,057,363)
(11,132,923)
(4,699,265)
(116,203,385)
$
(5,057,363)
(11,132,923)
(4,699,265)
(116,203,385)
(959)
(959)
1,493,855
1,493,855
(2,039,347)
(2,039,347)
(423)
(423)
138,816
138,816
8,041
8,041
(1,970)
(1,970)
(401,987)
(401,987)
$ ( 116 , 203 , 385 ) $
( 401 , 987 )
$ ( 116 , 605 , 372 )
Component
Units
$ (3,244,173)
(142,919)
(373,804)
$ ( 3 , 760 , 896 )
$ 68,793,292 $
—
$ 68,793,292 $
—
36,477,724
—
36,477,724
—
9,102,128
—
9,102,128
—
5,777,167
—
5,777,167
—
3,359,043
—
3,359,043
—
2,302,231
—
2,302,231
—
80,969
—
80,969
3,397,201
487,937
—
487,937
—
—
—
—
2,959,253
(2,296,010)
2,296,010
—
—
(54,537)
(26,913)
(81,450)
—
124 , 029,944
2 , 269,097
126 , 299,041
6 , 356,454
7,826,559
1,867,110
9,693,669
2,595,558
( 5 , 822 , 288 )
3 , 450,281
( 2 , 372 , 007 )
21 , 012,377
$ 2 , 004,271 $
5 , 317,391
$ 7 , 321,662 $
23 , 607,935
The notes to the financial statements are an integral part of this statement.
33
State of California Comprehensive Annual Financial Report
This page intentionally left blank
34
The notes to the financial statements are an integral part of this statement.
Fund Financial
Statements
State of California Comprehensive Annual Financial Report
Balance Sheet
Governmental Funds
June 30,2014
(amounts in thousands)
ASSETS
Cash and pooled investments.
Investments.
Receivables (net).
Due from other funds.
Due from other governments.
Interfund receivables.
Loans receivable.
Other assets.
Total assets.
LIABILITIES
Accounts payable.
Due to other funds.
Due to component units.
Due to other governments.
Interfiind payables.
Revenues received in advance.
Tax overpayments.
Deposits.
Interest payable.
Unclaimed property liability.
General obligation bonds payable.
Other liabilities.
Total liabilities.
DEFERRED INFLOWS OF RESOURCES.
Total liabilities and deferred inflows of resources.
FUND BALANCES
Nonspendable.
Restricted.
Committed.
Assigned.
Unassigned.
Total fund balances (deficit).
Total liabilites, deferred inflows of resources, and fund balances
General Federal
$
4 , 246,074
$
458,076
13 , 165,951
12,520
1 , 510,895
—
305,388
15 , 569,689
49,234
—
126,121
201,804
11,816
—
$
19 , 415,479
$
16 , 242,089
$
1 , 358,333
$
808,321
9 , 273,689
12 , 837,772
206,341
—
1 , 501,160
2 , 250,533
6 , 123,537
—
718,477
101,103
4 , 872,567
—
1,683
—
—
2,583
730,564
—
573,453
18,136
25 , 359,804
16 , 018,448
1 , 500,271
12,067
26 , 860,075
16 , 030,515
128,609
394,246
211,574
125,120
—
( 8 , 092 , 571 )
_
( 7 , 444 , 596 )
211,574
$
19 , 415,479
$
16 , 242,089
36
The notes to the financial statements are an integral part of this statement.
Fund Financial Statements
Environmental
and Natural
Transportation Resources
$
3 , 567,889
$
5 , 709,974
1 , 129,154
523,853
970,675
48,240
4,647
60,380
3 , 362,281
829,227
—
1 , 113,482
56,443
—
$
9 , 091,089
$
8 , 285,156
$
421,430
$
358,736
120,638
47,238
359,446
30,013
2,316
25,000
19,810
147,753
2,243
349
522,340
6,270
1 , 448,223
615,359
176,642
39,243
1 , 624,865
654,602
7 , 398,858
6 , 321,107
67,366
1 , 321,111
_
( 11 , 664 )
7 , 466,224
7 , 630,554
$
9 , 091,089 $
8 , 285,156
Nonmajor
Governmental Total
$
11 , 588,042
$
25 , 570,055
634,223
634,223
3 , 456,906
18 , 288,384
1 , 206,195
3 , 736,005
411,764
16 , 351,868
1 , 332,720
5 , 573,462
2 , 635,009
4 , 076,416
30,481
98,740
$
21 , 295,340
$
74 , 329,153
$
934,782
$
3 , 881,602
2 , 765,819
25 , 045,156
—
206,341
3 , 514,917
7 , 656,069
8,584
6 , 159,437
93,131
1 , 080,274
—
4 , 872,567
392,164
396,439
113,669
116,252
—
730,564
1 , 164,630
1 , 164,630
140,394
1 , 260,593
9 , 128,090
52 , 569,924
265,790
1 , 994,013
9 , 393,880
54 , 563,937
27,260
155,869
10 , 337,554
24 , 663,339
1 , 526,270
3 , 039,867
18,857
18,857
( 8 , 481 )
( 8 , 112 , 716 )
11 , 901,460
19 , 765,216
$
21 , 295,340
$
74 , 329,153
The notes to the financial statements are an integral part of this statement.
37
State of California Comprehensive Annual Financial Report
Reconciliation of the Governmental Funds
Balance Sheet to the Statement of Net Position
(amounts in thousands)
Total fund balances - governmental funds $ 19,765,216
Amounts reported for governmental activities in the Statement of Net Position are different from those in the
Governmental Funds Balance Sheet because:
• The following capital assets used in governmental activities are not financial resources and, therefore, are
not reported in the funds:
Land
18,256,083
State highway infrastructure
65,268,686
Collections - nondepreciable
22,630
Buildings and other depreciable property
26,893,376
Intangible assets - amortizable
1,027,753
Less: accumulated depreciation/amortization
(11,604,161)
Construction in progress
13,916,388
Intangible assets - nonamortizable
1,375,240
115,155,995
• State revenues that are earned and measurable, but not available within 12 months of the end of the reporting 1,994,013
period, are reported as deferred inflows of resources in the funds.
• Internal service funds are used by management to charge the costs of certain activities, such as building (5,483,510)
construction, architectural, procurement, and technology services, to individual funds. The assets and
liabilities of the internal service funds are included in governmental activities in the Statement of Net
Position, excluding amounts for activity between the internal service funds and governmental funds.
• Bond premiums/discounts and prepaid insurance charges are amortized over the life of the bonds and are (3,521,677)
included in the governmental activities in the Statement of Net Position.
• Deferred inflows and outflows of resources resulting from bond refunding gains and losses, respectively, are 761,882
amortized over the life of the bonds and are not reported in the funds.
• General obligation bonds and related accrued interest totaling $80,162,120, revenue bonds totaling (87,825,651)
$7,065,437, and certificates of participation and commercial paper totaling $598,094 are not due and
payable in the current period and are not reported in the funds.
• The following liabilities are not due and payable in the cun'ent period and are not reported in the funds:
Compensated absences
(3,588,310)
Capital leases
(260,088)
Net other postemployment benefits obligation
(18,172,547)
Mandated costs
(7,715,179)
Workers’ compensation
(3,247,861)
Proposition 98 funding guarantee
(1,519,468)
Net pension obligation
(3,237,785)
Pollution remediation obligations
(1,081,966)
Other noncurrent liabilities
(18,793)
(38,841,997)
Net position of governmental activities $ 2,004,271
38
The notes to the financial statements are an integral part of this statement.
Fund Financial Statements
This page intentionally left blank
39
State of California Comprehensive Annual Financial Report
Statement of Revenues, Expenditures
and Changes in Fund Balances
Governmental Funds
Year Ended June 30, 2014
(amounts in thousands)
REVENUES
Personal income taxes.
Sales and use taxes.
Corporation taxes.
Motor vehicle excise taxes.
Insurance taxes.
Other taxes.
Intergovernmental.
Licenses and permits.
Charges for services.
Fees.
Penalties.
Investment and interest.
Escheat.
Other.
Total revenues.
EXPENDITURES
Current:
General government.
Education.
Health and human services.
Resources.
State and consumer services.
Business and transportation.
Correctional programs.
Capital outlay.
Debt service:
Bond and commercial paper retirement.
Interest and fiscal charges.
Total expenditures.
Excess (deficiency) of revenues over (under) expenditures
OTHER EINANCING SOURCES (USES)
General obligation bonds and commercial paper issued.
Refunding debt issued.
Payment to refund long-term debt.
Premium on bonds issued.
Capital leases.
Transfers in.
Transfers out.
Total other Ilnancing sources (uses).
Net change in fund balances.
Fund balances (deflcit) - beginning.
Fund balances (deflcit) - ending..
* Restated
General Federal
$ 67,584,256 $
22,287,696
—
9,242,454
—
2,372,326
_
720,206
—
—
71,364,926
9,278
—
271,117
—
12,015
—
226,493
26
22,578
—
487,869
—
945,837
—
104,182,125
71,364,952
4,209,653
1,051,312
45,443,261
6,931,926
29,126,074
58,139,464
1,144,226
259,857
13,494
5,358
6,735
3,968,256
8,958,251
88,137
1,486,204
—
1,995,536
74,400
2,953,651
9,889
95,337,085
70,528,599
8,845,040
836,353
199,162
—
1,486,204
—
996,459
—
(3,915,547)
(822,732)
(1,233,722)
(822,732)
7,611,318
13,621
(15,055,914) *
197,953
$ (7,444,596) $
211,574
40
The notes to the financial statements are an integral part of this statement.
Fund Financial Statements
Transportation
Environmental
and Natural
Resources
Nonmajor
Governmental
Total
$ —
$ —
$ 1,187,411 $
68,771,667
638,691
—
13,482,924
36,409,311
—
—
—
9,242,454
5,777,167
—
—
5,777,167
—
—
986,717
3,359,043
5,755
135,662
1,435,402
2,297,025
—
—
1,635,674
73,000,600
4,050,999
367,484
2,529,356
6,957,117
123,437
116,427
258,321
769,302
18,686
2,282,398
6,306,159
8,619,258
39,261
56,252
816,186
1,138,218
10,433
48,219
56,524
137,754
2
—
1,074
488,945
69,078
658,946
1,229,474
2,903,335
10,733,509
3,665,388
29,925,222
219,871,196
199,058
97,949
9,220,242
14,778,214
2,222
3,194
928,833
53,309,436
2,620
153,680
17,359,656
104,781,494
244,712
3,625,155
234,910
5,508,860
101,221
62,587
438,377
621,037
11,462,522
8,329
275,690
15,721,532
—
—
1,348,846
10,395,234
—
253,153
169,653
1,909,010
712,871
280,502
3,939,632
7,002,941
4,303
8,436
1,344,761
4,321,040
12,729,529
4,492,985
35,260,600
218,348,798
(1,996,020)
(827,597)
(5,335,378)
1,522,398
3,211,565
182,365
1,688,375
5,082,305
95,830
351,155
1,630,345
2,077,330
—
(154,651)
(173,373)
(328,024)
83,282
43,970
178,612
505,026
—
—
—
1,486,204
25
240,099
2,804,667
4,041,250
(1,159,155)
(22,663)
(383,950)
(6,304,047)
2,231,547
640,275
5,744,676
6,560,044
235,527
(187,322)
409,298
8,082,442
7,230,697
7,817,876
11,492,162 *
11,682,774
$ 7,466,224 $
7,630,554 $
11,901,460 $
19,765,216
The notes to the financial statements are an integral part of this statement.
41
State of California Comprehensive Annual Financial Report
Reconciliation of the Statement of Revenues,
Expenditures and Changes in Fund Balances of Governmental
Funds to the Statement of Activities
(amounts in thousands)
Net change in fund balances - total governmental funds $ 8,082,442
Amounts reported for governmental activities in the Statement of Activities are different from those in the
Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds because:
• Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost
of those assets is allocated over their estimated useful lives as depreciation expense. In the current year,
these amounts are:
Depreciation expense, net of asset disposal (666,151)
Disposal of assets (1,797,155)
Purchase of assets _ 5,739,067
3,275,761
• Some revenues in the Statement of Activities do not provide current financial resources, and therefore are 95,078
unavailable in governmental funds.
• Internal service funds are used by management to charge the costs of certain activities, such as architectural, (124,281)
procurement, and technology services, to individual funds. The net revenue (expense) of the internal service
funds is reported with governmental activities, excluding amounts for activity between the internal service
funds and governmental funds.
• Bonds and other noncurrent financing instruments provide current financial resources to governmental funds
in the form of debt, which increases long-term liabilities in the Statement of Net Position. Repayment of
bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities
in the Statement of Net Position. The following amounts represent the difference between proceeds and
repayments:
(304,472)
94,211
(59,568)
(269,829)
• The following expenses reported in the Statement of Activities do not require the use of current financial
resources and, therefore, are not reported as expenditures in governmental funds:
Compensated absences
368,404
Capital leases
(23,783)
Net other postemployment benefits obligation
(2,978,601)
Mandated costs
(1,018,589)
Workers’ compensation
(188,809)
Proposition 98 funding guarantee
394,596
Net pension obligation
40,990
Pollution remediation obligations
(72,750)
Other noncurrent liabilities
245,930
(3,232,612)
Change in net position of governmental activities $ 7,826,559
General obligation bonds
Revenue bonds
Certificates of participation and commercial paper
42
The notes to the financial statements are an integral part of this statement.
Fund Financial Statements
This page intentionally left blank
43
State of California Comprehensive Annual Financial Report
Statement of Net Position
Proprietary Funds
June 30,2014
(amounts in thousands)
ASSETS
Current assets:
Cash and pooled investments.
Amount on deposit with U.S. Treasury.
Investments.
Restricted assets:
Cash and pooled investments.
Due from other governments.
Net investment in direct financing leases.
Receivables (net).
Due from other funds.
Due from other governments.
Prepaid items.
Inventories.
Recoverable power costs (net).
Other current assets .
Total current assets.
Noncurrent assets:
Restricted assets:
Cash and pooled investments.
Investments.
Loans receivable.
Investments.
Net investment in direct financing leases.
Receivables (net).
Interfund receivables.
Loans receivable.
Recoverable power costs (net).
Long-term prepaid charges.
Capital assets:
Land.
Collections — nondepreciable.
Buildings and other depreciable property.
Intangible assets — amortizable.
Less: accumulated depreciation/amortization ....
Construction in progress.
Intangible assets — non-amortizable.
Other noncurrent assets.
Total noncurrent assets.
Total assets.
DEFERRED OUTFLOWS OF RESOURCES ....
Total assets and deferred outflows of resources
Water
Electric Power
Resources
$
— $
466,978
651,000
—
—
35,068
3,000
1,129
—
39,429
—
5,203
156,000
—
810,000
547,807
629,000
82,728
300,000
72,388
—
91,517
—
15,232
4,490,000
—
—
1,214,450
—
137,033
—
4,736,960
—
36,796
—
(1,994,695)
—
402,520
—
151,047
5,419,000
4,945,976
6,229,000
5,493,783
80,000
116,741
$
6,309,000 $
5,610,524
44
The notes to the financial statements are an integral part of this statement.
Fund Financial Statements
Governmental
Business-type Activities - Enterprise Funds
Activities
State Unemployment California State
Lottery Programs University
Nonmajor
Enterprise
Total
Internal
Service Funds
$ 316,261 $
3,540,926 $
445,974 $
663,416 $
5,433,555 $
995,075
—
25,215
—
—
25,215
—
116,629
—
2,413,678
—
2,530,307
—
—
—
—
25,975
676,975
3,339,603
—
—
—
20,182
20,182
—
—
—
11,442
—
11,442
406,075
404,239
1,307,800
191,054
32,321
1,970,482
109,934
295
38,516
1,105
672
44,717
441,922
—
40,063
—
206,498
285,990
21,042
—
5,223
43,146
27
48,396
124,378
7,486
—
—
3,124
15,813
76,700
—
—
—
—
156,000
—
5,304
—
—
—
5,304
—
850,214
4,957,743
3,106,399
952,215
11,224,378
5,514,729
—
—
86
—
711,814
402,394
—
—
—
—
372,388
—
—
—
—
305,278
305,278
—
796,206
—
357,153
25,202
1,178,561
—
—
—
358,915
—
358,915
6,576,903
—
32,109
253,902
—
286,011
—
—
611,690
—
5,600
708,807
15,774
—
—
88,251
3,775,587
3,879,070
—
—
—
—
—
4,490,000
—
16,182
—
—
—
1,230,632
8,329
6,469
—
77,364
1,272
222,138
2,312
—
—
7,711
—
7,711
—
157,283
20,103
6,805,714
18,138
11,738,198
660,487
—
166,966
130,789
1,500
336,051
63,217
(68,421)
(16,476)
(2,484,444)
(17,313)
(4,581,349)
(545,849)
—
—
361,545
—
764,065
941,386
—
86,302
11,030
222
248,601
91,167
—
—
17,587
5,586
23,173
—
907,719
900,694
5,985,603
4,121,072
22,280,064
8,216,120
1,757,933
5,858,437
9,092,002
5,073,287
33,504,442
13,730,849
—
—
45,426
—
242,167
118,169
$ 1,757,933 $
5,858,437 $
9,137,428 $
5,073,287 $
33,746,609 $
13,849,018
(continued)
The notes to the financial statements are an integral part of this statement.
45
State of California Comprehensive Annual Financial Report
Statement of Net Position (continued)
Proprietary Funds
June 30,2014
(amounts in thousands)
LIABILITIES
Current liabilities:
Accounts payable.
Due to other funds.
Due to other governments.
Revenues received in advance.
Deposits.
Contracts and notes payable.
Interest payable.
Benefits payable.
Current portion of long-term obligations.
Other current liabilities.
Total current liabilities.
Noncurrent liabilities:
Interfund payables.
Loans payable.
Lottery prizes and annuities.
Compensated absences payable.
Workers’ compensation benefits payable.
Certificates of participation, commercial paper, and other borrowings .
Capital lease obligations.
General obligation bonds payable.
Revenue bonds payable.
Net other postemployment benefits obligation.
Revenues received in advance.
Other noncurrent liabilities.
Total noncurrent liabilities.
Total liabilities.
DEFERRED INFLOWS OF RESOURCES.
Total liabilities and deferred inflows of resources.
NET POSITION
Net investment in capital assets.
Restricted:
Nonexpendable - endowments.
Expendable:
Construction.
Debt service.
Security for revenue bonds.
Lottery.
Unemployment programs.
Other purposes.
Total expendable.
Unrestricted.
Total net position (deficit)..
Total liabilities, deferred inflows of resources, and net position
Electric Power
Water
Resources
$ 6,000
$ 78,158
47,681
85,725
48,000
13,188
694,000
191,637
748,000
416,389
384
29,765
—
36,136
_
184,960
5,555,000
2,532,234
5,616
176,769
_
205,957
5,561,000
3,165,821
6,309,000
3,582,210
—
822,886
6,309,000
4,405,096
—
994,561
—
210,867
—
210,867
—
1,205,428
$
6,309,000 $
5,610,524
46
The notes to the financial statements are an integral part of this statement.
Fund Financial Statements
Governmental
Business-type Activities - Enterprise Funds
Activities
State Unemployment California State
Lottery Programs University
Nonmajor
Enterprise
Total
Internal
Service Funds
$
52,691 $
19 $
173,638 $
2,637 $
313,143 $
503,197
314,912
59,896
—
1,552
424,041
100,637
—
43,428
—
7
129,160
879
2,979
63,017
256,641
32
322,669
315,022
429
15,202
—
—
—
—
—
—
—
—
11,444
72,632
118,944
—
482,396
—
—
482,396
—
559,401
—
459,605
26,256
1,930,899
504,843
9
53,247
371,550
126
424,932
105,562
929,992
702,003
1,261,434
42,054
4,099,872
1,664,715
138,606
—
7,633,391
—
—
7,633,391
—
683,180
—
—
—
683,180
—
—
51,428
98,543
2,739
182,859
166,723
2,538
—
—
—
2,538
43,037
—
—
14,970
—
51,106
—
—
—
1,180,232
—
1,180,232
—
—
—
—
432,357
617,317
—
—
—
3,567,026
415,647
12,069,907
10,822,897
41,114
129,505
267,013
8,405
628,422
444,312
—
—
11,460
—
11,460
—
—
—
166,382
73,709
446,048
21,329
726,832
7,814,324
5,305,626
932,857
23,506,460
11,636,904
1,656,824
8,516,327
6,567,060
974,911
27,606,332
13,301,619
—
—
—
—
822,886
—
1,656,824
8,516,327
6,567,060
974,911
28,429,218
13,301,619
95,330
256,895
714,940
3,824
2,065,550
245,439
—
—
16,219
—
16,219
—
_
_
34,199
_
245,066
282,605
—
—
139
25,975
26,114
4,796
—
—
—
325,460
325,460
—
101,109
—
—
—
101,109
—
—
3,800,470
—
—
3,800,470
—
—
—
44,680
354,415
399,095
—
101,109
3,800,470
79,018
705,850
4,897,314
287,401
(95,330)
(6,715,255)
1,760,191
3,388,702
(1,661,692)
14,559
101,109
(2,657,890)
2,570,368
4,098,376
5,317,391
547,399
$
1,757,933 $
5,858,437 $
9,137,428 $
5,073,287 $
33,746,609 $
13,849,018
(concluded)
47
The notes to the financial statements are an integral part of this statement.
State of California Comprehensive Annual Financial Report
Statement of Revenues, Expenses and
Changes in Fund Net Position
Proprietary Funds
Year Ended June 30, 2014
(amounts in thousands)
OPERATING REVENUES
Unemployment and disability insurance.
Lottery ticket sales.
Power sales.
Student tuition and fees.
Services and sales.
Investment and interest.
Rent.
Grants and contracts.
Other.
Total operating revenues.
OPERATING EXPENSES
Lottery prizes.
Power purchases (net of recoverable power costs).
Personal services.
Supplies.
Services and charges.
Depreciation.
Scholarships and fellowships.
Distributions to beneficiaries.
Interest expense.
Amortization (recovery) of long-term prepaid charges.
Other.
Total operating expenses.
Operating income (loss).
NONOPERATING REVENUES (EXPENSES)
Donations and grants.
Private gifts.
Investment and interest income.
Interest expense and fiscal charges.
Lottery payments for education.
Loss on early extinguishment of debt.
Other.
Total nonoperating revenues (expenses).
Income (loss) before capital contributions and transfers
Capital contributions.
Transfers in.
Transfers out.
Change in net position.
Total net position (deficit) - beginning.
Total net position (deficit) - ending.
*Restated
Electric Power
Water
Resources
$ — $
—
(44,000)
131,952
—
841,556
(44,000)
973,508
(61,000)
241,444
311,144
15,000
246,065
68,896
(46,000)
867,549
2,000
105,959
879,000
(881,000)
(115,499)
—
9,540
(2,000)
(105,959)
—
—
—
1,205,428
$ — $
1,205,428
48
The notes to the financial statements are an integral part of this statement.
Fund Financial Statements
Governmental
Business-type Activities - Enterprise Funds _ Activities
State
Unemployment
California State
Nonmajor
Internal
Lottery
Programs
University
Enterprise
Total
Service Funds
$ —
$ 15,160,251
$ — $
— $
15,160,251
$ —
5,034,661
—
—
—
5,034,661
—
—
—
—
—
87,952
—
—
—
2,123,212
—
2,123,212
—
—
—
458,527
83,524
1,383,607
2,543,093
—
—
—
116,677
116,677
8,173
—
—
—
1,044
1,044
418,574
—
—
73,343
—
73,343
—
—
—
178,656
3,807
182,463
5,143
5,034,661
15,160,251
2,833,738
205,052
24,163,210
2,974,983
3,082,376
3,082,376
—
—
—
—
180,444
—
66,109
163,545
4,033,120
14,961
4,588,879
913,906
16,371
—
1,221,702
—
1,238,073
9,821
537,078
85,466
—
87,003
970,612
1,587,712
6,075
7,423
259,201
461
342,056
47,903
—
—
862,479
—
862,479
—
—
13,416,969
—
—
13,416,969
—
—
—
—
38,486
38,486
440,300
—
—
—
—
—
1,496
—
—
—
1,491
1,491
9,393
3,708,009
13,673,403
6,376,502
142,402
24,721,865
3,010,531
1,326,652
1,486,848
(3,542,764)
62,650
(558,655)
(35,548)
1,491,559
1,491,559
—
—
39,636
—
39,636
—
43,288
7,007
43,610
1,275
974,180
575
(42,998)
—
(168,434)
(355)
(1,208,286)
(3)
(1,327,928)
—
—
—
(1,327,928)
—
—
—
—
(26,913)
(26,913)
(54,537)
27
—
97,046
(9)
106,604
(1,555)
(1,327,611)
7,007
1,503,417
(26,002)
48,852
(55,520)
(959)
1,493,855
(2,039,347)
36,648
(509,803)
(91,068)
—
—
—
80,903
80,903
—
—
—
2,302,858
—
2,302,858
76,657
—
—
—
(6,848)
(6,848)
(109,870)
(959)
1,493,855
263,511
110,703
1,867,110
(124,281)
102,068
(4,151,745)
2,306,857 *
3,987,673
3,450,281
671,680
$ 101,109
$ (2,657,890)
$ 2,570,368 $
4,098,376 $
5,317,391
$ 547,399
The notes to the financial statements are an integral part of this statement.
49
State of California Comprehensive Annual Financial Report
Statement of Cash Flows
Proprietary Funds
Year Ended June 30, 2014
(amounts in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers/employers.
Receipts from interfund services provided.
Payments to suppliers.
Payments to employees.
Payments for interfund services used.
Payments for Lottery prizes.
Claims paid to other than employees.
Other receipts (payments).
Net cash provided by (used in) operating activities.
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Changes in interfund payables and loans payable.
Receipt of bond charges.
Retirement of general obligation bonds.
Retirement of revenue bonds.
Interest paid on operating debt.
Transfers in.
Transfers out.
Grants received.
Lottery payments for education.
Net cash provided by (used in) noncapitai financing activities.
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Acquisition of capital assets.
Proceeds from sale of capital assets.
Proceeds from notes payable and commercial paper.
Principal paid on notes payable and commercial paper.
Proceeds from capital leases.
Payment on capital debt and leases.
Retirement of general obligation bonds.
Proceeds from revenue bonds.
Retirement of revenue bonds.
Interest paid.
Grants received.
Net cash provided by (used in) capitai and reiated financing activities.
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments.
Proceeds from maturity and sale of investments.
Change in interfund receivables and loans receivable.
Earnings on investments.
Net cash provided by (used in) investing activities.
Net increase (decrease) in cash and pooled investments.
Cash and pooled investments - beginning.
Cash and pooled investments - ending..
Electric Power
Water
Resources
$ (38,000) $
986,586
(38,000)
(461,499)
(4,000)
(311,144)
—
46,099
(80,000)
260,042
864,000
(611,000)
(312,000)
—
(59,000)
—
—
(210,594)
—
108,765
—
(123,134)
—
(61,085)
—
180,159
—
(114,775)
—
(120,230)
—
(340,894)
(252,174)
—
252,174
—
1,237
18,000
7,758
18,000
8,995
(121,000)
(71,857)
1,401,000
621,563
$
1,280,000 $
549,706
50
The notes to the financial statements are an integral part of this statement.
Fund Financial Statements
Business-type Activities
- Enterprise Funds
Governmental
Activities
State Unemployment California State
Lottery Programs University
Nonmajor
Enterprise
Total
Internal
Service Funds
$
5,013,487 $
15,150,430 $
2,583,311 $
367,535 $
24,063,349
$ 3,328,192
—
—
—
419
419
131,813
(218,881)
(85,464)
(1,175,200)
(85,538)
(2,064,582)
(1,563,512)
(50,726)
(143,569)
(3,951,474)
(13,533)
(4,474,446)
(843,001)
(15,070)
(35,075)
—
(950)
(51,095)
(93,495)
(3,567,224)
—
—
—
(3,567,224)
—
(345,503)
(13,698,487)
—
—
(14,043,990)
—
499,198
135,638
(651,704)
(260,098)
(230,867)
(451,504)
1,315,281
1,323,473
(3,195,067)
7,835
(368,436)
508,493
(951,927)
(1,213)
(953,140)
567
—
—
—
—
864,000
—
—
—
—
(151,715)
(151,715)
—
—
—
—
(85,391)
(696,391)
—
—
—
—
(2,080)
(314,080)
(415)
—
—
2,302,858
—
2,302,858
76,657
—
—
—
(6,848)
(6,848)
(109,870)
—
—
1,618,834
—
1,618,834
—
(1,415,702)
—
—
—
(1,415,702)
—
(1,415,702)
(951,927)
3,920,479
(246,034)
1,247,816
(33,061)
(19,178)
(2,824)
(430,502)
(430)
(663,528)
(1,338,493)
39
14,467
405
—
14,911
18,558
—
—
17,733
—
126,498
—
—
—
—
—
(123,134)
—
—
—
68,756
—
68,756
—
—
—
(384,777)
—
(384,777)
—
—
—
—
—
(61,085)
—
—
—
464,372
—
644,531
2,323,173
—
—
(349,702)
—
(464,477)
(412,085)
—
—
—
—
(120,230)
—
—
—
26,473
82,351
108,824
—
(19,139)
11,643
(587,242)
81,921
(853,711)
591,153
(65,037)
(7,743,216)
(2,500)
(8,062,927)
134,853
14,748
7,497,304
—
7,899,079
—
—
—
—
—
1,237
—
23,080
7,007
20,721
1,310
77,876
576
92,896
21,755
(225,191)
(1,190)
(84,735)
576
(26,664)
404,944
(87,021)
(157,468)
(59,066)
1,067,161
342,925
3,135,982
533,081
846,859
6,881,410
3,669,911
$
316,261 $
3,540,926 $
446,060 $
689,391 $
6,822,344
$ 4,737,072
(continued)
The notes to the financial statements are an integral part of this statement.
51
State of California Comprehensive Annual Financial Report
Statement of Cash Flows (continued)
Proprietary Funds
Year Ended June 30, 2014
(amounts in thousands)
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES
Operating income (loss).
Adjustments to reconcile operating income (loss) to net cash provided
by (used in) operating activities:
Interest expense on operating debt.
Depreciation.
Provisions and allowances.
Amortization of premiums and discounts.
Amortization of long-term prepaid charges and credits.
Other.
Change in assets and liabilities:
Receivables.
Due from other funds.
Due from other governments.
Prepaid items.
Inventories.
Net investment in direct financing leases.
Recoverable power costs (net).
Other current assets.
Loans receivable.
Accounts payable.
Due to other funds.
Due to component units.
Due to other governments.
Deposits.
Contracts and notes payable.
Interest payable.
Revenues received in advance.
Other current liabilities.
Benefits payable.
Lottery prizes and annuities.
Compensated absences payable.
Other noncurrent liabilities.
Total adjustments.
Net cash provided by (used in) operating activities .
Noncash investing, capital, and financing activities:
Interest accreted on annuitized prizes.
Interest accreted on zero coupon bonds.
Unclaimed Lottery prizes directly allocated to another entity.
Impairment loss of utility plant.
Contributed capital assets.
Change in accrued capital asset purchases.
Amortization of bond premium and discount .
Issuance of notes receivable through proceeds from long-term debt.
Proceeds from long-term debt received directly by discretely presented
component units.
Collection of notes reveivable used to directly pay long-term debt.
Payment of long-term debt made directly by discretely presented component units
Debt restructure and termination of direct financing leases.
Other miscellaneous noncash transactions.
Water
Electric Power
Resources
$ 2,000 $
105,959
—
68,896
—
(11,996)
—
46,098
—
57,304
—
(19,202)
—
2,211
(94,000)
—
14,000
—
(3,000)
25,290
—
(1,490)
—
(13,028)
1,000
—
(82,000)
154,083
$ (80,000) $
260,042
$ — $
11,795
12,029
7,850
52
The notes to the financial statements are an integral part of this statement.
Fund Financial Statements
Governmental
Business-type Activities - Enterprise Funds
Activities
State Unemployment California State
Lottery Programs University
Nonmajor
Enterprise
Total
Internal
Service Funds
$
1,326,652
$
1,486,848
$
(3,542,764)
$
62,650
$
(558,655)
$
(35,548)
6,075
7,423
259,201
461
342,056
412
47,903
922
—
—
(3,586)
(2,664)
—
—
—
—
505
505
(44,113)
3,230
—
—
948
(7,818)
18,058
12
—
(3,678)
(8,480)
33,952
8,598
(42,663)
33,778
8,258
2,208
58,885
9,177
—
(7,220)
1,105
11
(6,104)
71,084
—
97,362
—
1,450
79,610
5,312
—
—
(4,187)
(26)
(4,213)
(14,686)
377
—
—
(425)
2,163
16,304
—
—
—
8,468
8,468
389,895
—
—
—
—
(94,000)
—
464
—
—
98
14,562
—
—
—
(1,459)
(63,829)
(65,288)
—
(1,812)
2
(9,710)
(1,662)
9,108
2,795
(145)
8,777
—
(966)
6,176
(59,044)
—
—
—
—
—
(2,059)
—
(6,885)
—
4
(19,909)
585
—
—
196
—
196
(47)
—
—
—
—
—
4,487
—
—
—
(106)
(106)
(3,370)
(161)
23,957
15,728
(11)
39,513
7,008
794
8,529
5,006
10,744
25,073
(1,306)
—
(281,518)
18,839
80
(262,599)
64,971
14,210
—
—
—
14,210
—
7,326
(3,868)
10,402
24
14,884
(5,593)
—
23,844
47,996
(725)
71,115
27,670
(11,371)
(95,819)
347,697
(54,815)
257,775
544,041
$
1,315,281
$
1,391,029
$
(3,195,067)
$
7,835
$
(300,880)
$
508,493
(concluded)
$
42,998
$
—
$
—
$
—
$
42,998
$
—
15,608
—
—
—
15,608
—
21,673
—
—
—
21,673
—
—
—
—
—
11,795
—
—
—
20,588
—
20,588
—
—
—
8,945
—
8,945
—
—
—
15,068
—
27,097
—
—
—
40,464
—
40,464
—
_
_
40,464
_
40,464
_
—
—
11,685
—
11,685
—
—
—
11,685
—
11,685
—
—
—
—
22,006
22,006
114,285
4,830
—
16,042
—
28,722
—
The notes to the financial statements are an integral part of this statement.
53
State of California Comprehensive Annual Financial Report
Statement of Fiduciary Net Position
Fiduciary Funds and Similar Component Units
June 30,2014
(amounts in thousands)
Private
Purpose
Trust
Pension
and Other
Empioyee
Benefit
Trust
Investment
Trust
Local Agency
Investment
Agency
ASSETS
Cash and pooled investments.
Investments, at fair value:
Short-term.
Equity securities.
Debt securities.
Real estate.
Other.
Securities lending collateral.
... $ 49,896
3,218,383
1,844,304
188,273
777,884
$ 2,687,933
13,010,538
270,858,397
109,483,220
53,253,600
62,879,102
39,699,637
$ 21,131,371
$
3,682,227
Total investments.
6,028,844
549,184,494
—
—
Receivables (net).
8,499
5,016,735
—
2,129,562
Due from other funds.
85,929
567,552
—
20,693,709
Due from other governments.
—
18,501
—
7,662
Prepaid items.
—
—
—
28,928
Loans receivable.
—
22,005
—
7,257
Other assets.
172,661
930,877
—
93
Total assets .
6,345,829
558,428,097
21,131,371
$
26,549,438
LIABILITIES
Accounts payable.
31,335
2,966,302
45
$
14,942,369
Due to other governments.
—
—
11,251
9,984,233
Tax overpayments.
—
—
—
4,632
Benefits payable.
—
2,655,305
—
—
Revenues received in advance.
—
—
—
22,125
Deposits.
172,661
—
—
987,603
Securities lending obligations.
—
39,546,799
—
—
Loans payable.
—
944,269
—
—
Other liabilities.
938
2,090,618
—
608,476
Total liabilities.
204,934
48,203,293
11,296
$
26,549,438
NET POSITION
Restricted for pension benefits,
pooi participants, and other empioyee benefits.
... $ 6,140,895
$ 510,224,804
$ 21,120,075
54
The notes to the financial statements are an integral part of this statement.
Fund Financial Statements
Statement of Changes in Fiduciary Net Position
Fiduciary Funds and Similar Component Units
Year Ended June 30, 2014
(amounts in thousands)
ADDITIONS
Contributions:
Employer.
Plan member.
Total contributions.
Investment income:
Net appreciation (depreciation) in fair value of investments
Interest, dividends, and other investment income.
Less: investment expense.
Net investment income.
Receipts from depositors.
Other.
Total additions.
DEDUCTIONS
Distributions paid and payable to participants.
Refunds of contributions.
Administrative expense.
Interest expense.
Payments to and for depositors.
Total deductions.
Change in net position.
Net position - beginning.
Net position - ending.
Private
Purpose
Trust
Pension
and Other
Employee
Benefit
Trust
$ —
$ 14,397,367
—
6,958,991
—
21,356,358
512,830
71,480,345
244,806
8,581,008
(4,023)
(1,771,132)
753,613
78,290,221
3,059,755
—
—
32,452
3,813,368
99,679,031
31,006,086
444,619
565,212
618,801
2,827,129 _ 32,634,718
986,239
67,044,313
5,154,656
443,180,491
$
6,140,895
$ 510,224,804
3
2,827,126
Investment
Trust
Local Agency
Investment
$
50,201
50,201
21,647,510
21,697,711
48,512
1,689
21,739,535
21,789,736
(92,025)
21,212,100
$ 21,120,075
The notes to the financial statements are an integral part of this statement.
55
State of California Comprehensive Annual Financial Report
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56
Discretely Presented
Component Units
Financial Statements
State of California Comprehensive Annual Financial Report
Statement of Net Position
Discretely Presented Component Units - Enterprise Activity
June 30,2014
(amounts in thousands)
ASSETS
Current assets:
Cash and pooled investments.
Investments.
Restricted assets:
Cash and pooled investments.
Investments.
Receivables (net).
Due from primary government.
Due from other governments.
Prepaid items.
Inventories.
Other current assets .
Total current assets.
Noncurrent assets:
Restricted assets:
Cash and pooled investments.
Investments.
Investments.
Receivables (net).
Loans receivable.
Long-term prepaid charges.
Capital assets:
Land.
Collections - nondepreciable.
Buildings and other depreciable property.
Intangible assets - amortizable.
Less: accumulated depreciation/amortization ....
Construction in progress.
Intangible assets - non-amortizable.
Other noncurrent assets.
Total noncurrent assets.
Total assets.
DEFERRED OUTFLOWS OF RESOURCES ....
Total assets and deferred outflows of resources
California
University
of
California
Housing
Finance
Agency
$ 322,711 $
1,081,220
4,717,181
100,943
3,167,380
172,460
205,129
—
97,342
—
—
534
194,615
—
208,674
14,145
8,913,032
1,369,302
25,686,412
403,112
2,488,712
—
—
3,781,555
863,455
382,277
—
41,502,981
1,782
823,393
—
(19,569,114)
(940)
3,642,165
—
286,504
16,681
56,106,785
4,202,190
65 , 019,817
5 , 571,492
3 , 705,459
25,710
$
68 , 725,276 $
5 , 597,202
58
The notes to the financial statements are an integral part of this statement.
Component Unit Financial Statements
Nonmajor
Component
Units Total
$
949,157 $
2,353,088
404,400
5,222,524
128,517
128,517
15,929
15,929
447,432
3,787,272
1,212
206,341
—
97,342
742
1,276
—
194,615
32,349
255,168
1,979,738
12,262,072
26,725
26,725
14,286
14,286
1,841,034
27,930,558
252,630
2,741,342
285,454
4,067,009
139,066
1,002,521
8,401
390,678
1,995,127
43,499,890
12,578
835,971
(972,702)
(20,542,756)
19,357
3,661,522
5,082
5,082
50,751
353,936
3,677,789
63,986,764
5 , 657,527
76 , 248,836
6,069
3 , 737,238
$
5 , 663,596 $
79 , 986,074
(continued)
The notes to the financial statements are an integral part of this statement.
59
State of California Comprehensive Annual Financial Report
Statement of Net Position (continued)
Discretely Presented Component Units - Enterprise Activity
June 30,2014
(amounts in thousands)
LIABILITIES
Current liabilities:
Accounts payable.
Due to other governments.
Revenues received in advance.
Deposits.
Contracts and notes payable.
Interest payable.
Securities lending obligations.
Current portion of long-term obligations.
Other current liabilities.
Total current liabilities.
Noncurrent liabilities:
Compensated absences payable.
Workers’ compensation benefits payable.
Certificates of participation, commercial paper, and other borrowings
Capital lease obligations.
Revenue bonds payable.
Net other postemployment benefits obligation.
Net pension obligation.
Other noncurrent liabilities.
Total noncurrent liabilities.
Total liabilities.
DEFERRED INFLOWS OF RESOURCES.
Total liabilities and deferred inflows of resonrces.
NET POSITION
Net Investment in capital assets.
Restricted:
Nonexpendable - endowments.
Expendable:
Endowments and gifts.
Education.
Indenture.
Employee benefits.
Workers’ compensation liability.
Statute .
Other purposes.
Total expendable.
Unrestricted.
Total net position.
Total liabilities, deferred inflows of resonrces, and net position .
California
University
Honsing
of
Finance
California
Agency
$
1,483,299 $
89,309
1,061,477
—
561,009
227,493
—
58,170
1,269,083
—
3,432,534
74,248
1,532,342
599
9,339,744
449,819
262,593
321,055
—
88,622
—
15,424,508
3,526,190
8,440,303
22,295
7,725,075
—
1,206,888
201,429
33,469,044
3,749,914
42 , 808,788
4 , 199,733
7 , 108,562
—
49 , 917,350
4 , 199,733
12,166,807
842
4,343,651
—
9,903,548
—
783,994
—
—
491,187
986,565
10,687,542
1,477,752
(8,390,074)
(81,125)
18 , 807,926
1 , 397,469
$
68 , 725,276 $
5 , 597,202
60
The notes to the financial statements are an integral part of this statement.
Component Unit Financial Statements
Nonmajor
Component
Units Total
$
265,990 $
1,838,598
54,967
54,967
66,239
1,127,716
1,549
790,051
16,326
16,326
2,764
60,934
—
1,269,083
298,756
3,805,538
288,847
1,821,788
995,438
10,785,001
12,691
275,284
283
321,338
20,255
20,255
360,026
448,648
237,203
19,187,901
117,649
8,580,247
—
7,725,075
515,950
1,924,267
1,264,057
38,483,015
2 , 259,495
49 , 268,016
1,561
7 , 110,123
2 , 261,056
56 , 378,139
515,314
12,682,963
945,897
5,289,548
9,378
9,912,926
924,763
1,708,757
—
491,187
281,696
1,268,261
25,769
25,769
1,241,606
13,406,900
699,723
(7,771,476)
3 , 402,540
23 , 607,935
$
5 , 663,596 $
79 , 986,074
(concluded)
The notes to the financial statements are an integral part of this statement.
61
State of California Comprehensive Annual Financial Report
Statement of Activities
Discretely Presented Component Units - Enterprise Activity
Year Ended June 30, 2014
(amounts in thousands)
OPERATING EXPENSES
Personal services.
Scholarships and fellowships.
Supplies.
Services and charges.
Department of Energy laboratories
Depreciation.
Interest expense and fiscal charges
Grants provided.
Other.
Total operating expenses.
PROGRAM REVENUES
Charges for services.
Operating grants and contributions
Capital grants and contributions ....
Total program revenues.
Net revenues (expenses) .
GENERAL REVENUES
Investment and interest income.
Other.
Total general revenues.
Change in net position.
Net position - beginning .
Net position - ending.
* Restated
California
University
Housing
of
Finance
California
Agency
$ 17,267,563 $
29,703
577,212
—
2,584,968
—
290,444
29,572
1,244,335
—
1,739,612
264
617,000
122,277
642,809
—
3,750,169
53,348
28,714,112
235,164
16,945,088
38,783
8,051,387
53,462
473,464
—
25,469,939
92,245
(3,244,173)
(142,919)
2,972,157
171,294
2,502,492
22,899
5,474,649
194,193
2,230,476
51,274
16,577,450 *
1,346,195
$ 18,807,926 $
1,397,469
62
The notes to the financial statements are an integral part of this statement.
Component Unit Financial Statements
Nonmajor
Component
Units
Total
$ 500,490 $
17,797,756
54,938
632,150
10,726
2,595,694
1,272,317
1,592,333
—
1,244,335
74,536
1,814,412
34,895
774,172
—
642,809
69,477
3,872,994
2,017,379
30,966,655
1,069,909
18,053,780
564,519
8,669,368
9,147
482,611
1,643,575
27,205,759
(373,804)
(3,760,896)
253,750
3,397,201
433,862
2,959,253
687,612
6,356,454
313,808
2,595,558
3,088,732 *
21,012,377
$ 3,402,540 $
23,607,935
The notes to the financial statements are an integral part of this statement.
63
State of California Comprehensive Annual Financial Report
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64
The notes to the financial statements are an integral part of this statement.
Notes to the Financial Statements
Notes to the Financial Statements - Index
Note 1. Summary of Significant Accounting Policies. 69
A. Reporting Entity. 69
1. Blended Component Units. 69
2. Fiduciary Component Units. 70
3. Discretely Presented Component Units. 70
4. Joint Venture. 72
5. Related Organizations. 72
B. Government-wide and Fund Financial Statements. 74
C. Measurement Focus and Basis of Accounting. 77
1. Government-wide Financial Statements. 77
2. Fund Financial Statements. 77
D. Cash and Investments. 78
E. Receivables. 78
F. Inventories. 78
G. Net Investment in Direct Financing. 78
H. Fong-term Prepaid Charges. 78
I. Capital Assets. 79
J. Fong-term Obligations. 80
K. Compensated Absences. 80
F. Deferred Outflows and Deferred Inflows of Resources . 81
1. Deferred Outflows of Resources. 81
2. Deferred Inflows of Resources. 81
M. Abnormal Fund Balances. 82
N. Nonmajor Enterprise Segment Information. 82
O. Net Position and Fund Balance. 82
P Restatement of Beginning Fund Balances and Net Position. 83
1. Fund Financial Statements. 83
2. Government-wide Financial Statements. 84
Q. Guaranty Deposits. 84
Note 2. Budgetary and Fegal Compliance. 85
A. Budgeting and Budgetary Control. 85
B. Fegal Compliance. 85
Note 3. Deposits and Investments. 86
A. Primary Government. 86
1. Control of State Funds. 86
65
State of California Comprehensive Annual Financial Report
2. Valuation of State Investments. 87
3. Oversight of Investing Activities. 87
4. Risk of Investments. 88
a. Interest Rate Risk. 89
b. Credit Risk. 90
c. Custodial Credit Risk. 90
d. Concentration of Credit Risk. 90
B. Fiduciary Funds. 91
C. Discretely Presented Component Units. 91
Note 4. Accounts Receivable. 92
Note 5. Restricted Assets. 94
Note 6. Net Investment in Direct Financing Leases. 94
Note 7. Capital Assets. 96
Note 8. Accounts Payable. 98
Note 9. Short-term Financing. 100
Note 10. Long-term Obligations. 100
Note 11. Certificates of Participation. 104
Note 12. Commercial Paper and Other Long-term Borrowings. 104
Note 13. Leases. 105
Note 14. Commitments. 106
Note 15. General Obligation Bonds. 108
A. Variable-rate General Obligation Bonds. 108
B. Economic Recovery Bonds. 109
C. Mandatory Tender Bonds. 109
D. Build America Bonds. 110
E. Debt Service Requirements. 110
F. General Obligation Bond Defeasances. Ill
1. Current Year. Ill
2. Prior Years. Ill
Note 16. Revenue Bonds. Ill
A. Governmental Activities. Ill
B. Business-type Activities. 112
C. Discretely Presented Component Units. 112
D. Revenue Bond Defeasances. 114
1. Current Year - Governmental Activities. 114
2. Current Year - Business-type Activities. 115
3. Prior Years. 115
66
Notes to the Financial Statements
Note 17. Service Concession Arrangements. 115
Note 18. Interfund Balances and Transfers. 116
A. Interfund Balances. 116
B. Interfund Transfers. 122
Note 19. Fund Balances, Fund Deficits, and Endowments. 124
A. Fund Balances. 124
B. Fund Deficits. 125
C. Discretely Presented Component Unit Endowments and Gifts. 125
Note 20. Risk Management. 125
Note 21. Deferred Outflows and Deferred Inflows of Resources. 127
Note 22. No Commitment Debt. 127
Note 23. Contingent Eiabilities. 127
A. Eitigation. 127
B. Federal Audit Exceptions. 129
Note 24. Pension Trusts. 130
A. Public Employees'Retirement Fund. 130
1. Fund Information. 130
2. Employer's Information. 131
B. Teachers'Retirement Fund. 132
Note 25. Postemployment Health Care Benefits. 136
Note 26. Subsequent Events. 139
A. Debt Issuances. 139
B. Cash Management. 139
C. Other. 140
67
State of California Comprehensive Annual Financial Report
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68
Notes to the Financial Statements
Notes to the Financial Statements
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements present information on the financial activities of the State of
California over which the Governor, the Legislature, and other elected officials have direct or indirect
governing and fiscal control. These financial statements have been prepared in conformity with accounting
principles generally accepted in the United States of America (GAAP). The provisions of the following
Governmental Accounting Standards Board (GASB) Statements have been implemented for the year ended
June 30, 2014:
GASB Statement No. 66, Technical Corrections — 2012—an amendment of GASB Statements No. 10 and
No. 62. The objective of this statement is to improve accounting and financial reporting for a
governmental financial reporting entity by resolving conflicting guidance that resulted from the issuance
of two pronouncements. Statement No. 54, Fund Balance Reporting and Governmental Fund Type
Definitions, and Statement No. 62, Codification of Accounting and Financial Reporting Guidance
Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements; and
GASB Statement No. 70, Accounting and Financial Reporting for Nonexchange Financial Guarantees,
requires governments that extend a nonexchange financial guarantee to recognize a liability when
qualitative factors and historical data, if any, indicate that it is more likely than not that the government
will be required to make a payment on the guarantee.
A. Reporting Entity
These financial statements present the primary government of the State and its component units. The primary
government consists of all funds, organizations, institutions, agencies, departments, and offices that are not
legally separate from the State. Component units are organizations that are legally separate from the State,
but for which the State is financially accountable or organizations whose relationship with the State is such
that exclusion would cause the State’s financial statements to be misleading. Following is information on the
blended, fiduciary, and discretely presented component units of the State.
1. Blended Component Units
Blended component units, although legally separate entities, are in substance part of the primary government’s
operations. Therefore, data from these blended component units are integrated into the appropriate funds for
reporting purposes.
Building authorities are blended component units because they have been created through the use of joint
exercise of powers agreements with various cities to finance the construction of state buildings. The building
authorities are reported as capital projects funds. As a result, capital lease arrangements between the building
authorities and the State have been eliminated from the financial statements. Instead, only the underlying
capital assets and the debt used to acquire them are reported in the government-wide financial statements. For
information regarding obtaining copies of the financial statements of the building authorities, email the State
Controller’s Office, Division of Accounting and Reporting at StateGovReports@sco.ca.gov.
The Golden State Tobacco Securitization Corporation (GSTSC) is a not-for-profit corporation established
through legislation in September 2002 solely for the purpose of purchasing Tobacco Settlement Revenues
69
State of California Comprehensive Annual Financial Report
from the State. The five voting members of the State Publie Works Board serve ex offieio as the directors of
the corporation. GSTSC is authorized to issue bonds as necessary to provide sufficient funds for carrying out
its purpose. GSTSC is reported in the combining statements in the Nonmajor Governmental Funds section as
a special revenue fund. For information regarding obtaining copies of the financial statements of GSTSC,
contact the Department of Finance, Natural Resources, Energy, Environmental, and Capital Outlay Section,
915 E Street, 9th Floor, Sacramento, California 94814.
2. Fiduciary Component Units
The State has two legally separate fiduciary component units that administer pension and other employee
benefit trust funds. The State appoints a voting majority of the board members of both plans which, due to
their fiduciary nature, are presented in the Fiduciary Fund Statements as pension and other employee benefit
trust funds, along with other primary government fiduciary funds.
The California Public Employees’ Retirement System (CalPERS) administers pension plans for state
employees, non-teaching school employees, and employees of California public agencies. Its Board of
Administration has plenary authority and fiduciary responsibility for the investment of monies and the
administration of the plan. CalPERS administers the following seven pension and other employee benefits
trust funds: the Public Employees’ Retirement Fund, the Judges’ Retirement Fund, the Judges’ Retirement
Fund II, the Eegislators’ Retirement Fund, the State Peace Officers’ and Firefighters’ Defined Contribution
Plan Fund, the Public Agency Deferred Compensation Plan, and the public employee Supplemental
Contributions Program Fund. CalPERS’ separately issued financial statements may be obtained from the
California Public Employees’ Retirement System on its website at www.CalPERS.ca.gov.
The California State Teachers ’ Retirement System (CalSTRS) administers pension benefit plans for California
public school teachers and certain other employees of the public school system. The State is financially
accountable for CalSTRS. CalSTRS administers the following four pension and other employee benefit trust
funds: the Defined Benefit Program, the Defined Benefit Supplement Program, the Cash Balance Benefit
Program, and the Replacement Benefit Program. CalSTRS’ separately issued financial statements may be
obtained from the California State Teachers’ Retirement System on its website at www.CalSTRS.com.
3. Discretely Presented Component Units
Enterprise activity of discretely presented component units is reported in a separate column in the
government-wide financial statements. Discretely presented component units are legally separate from the
primary government and primarily provide services to entities and individuals outside the primary
government. Discretely presented component units that report enterprise activity include the University of
California, the California Housing Finance Agency, and nonmajor component units. Most component units
separately issue their own financial statements. In general, the notes to the financial statements in this
publication do not include information found in the component units’ separately issued financial statements.
Instead, references to the individual component unit financial statements are provided where applicable.
The University of California was founded in 1868 as a public, state-supported, land grant institution. It was
written into the State Constitution of 1879 as a public trust to be administered by a governing board, the
Regents of the University of California (Regents). The University of California is a component unit of the
State because the State appoints a voting majority of the Regents and provides financial assistance to the
University. The University of California offers defined benefit pension plans and defined contribution pension
plans to its employees through the University of California Retirement System (UCRS), a fiduciary
responsibility of the Regents. The financial information of the UCRS is not included in the financial
statements of this report due to its fiduciary nature. The University of California’s financial statements may be
obtained from the University of California on its website at www.ucop.edu.
70
Notes to the Financial Statements
The California Housing Finance Agency (CalHFA) was created by the Zenovich-Moscone-Chacon Housing
and Home Finance Act, as amended. CalHFA’s purpose is financing the housing needs of persons and families
of low and moderate income. It is a component unit of the State because the State appoints a voting majority
of CalHFA’s governing board and appoints the executive director who administers the day-to-day operations.
CalHFA’s financial statements may be obtained from the California Housing Finance Agency on its website at
www.CalHFA.ca.gov.
State legislation created various nonmajor component units to provide certain services outside the primary
government and to provide certain private and public entities with a low-cost source of financing for programs
deemed to be in the public interest. California State University auxiliary organizations are considered
component units because they exist entirely or almost entirely for the direct benefit of the universities. The
remaining nonmajor component units are considered component units because the majority of members of
their governing boards are appointed by or are members of the primary government, and the primary
government can impose its will on the entity; or the entity provides a specific financial benefit to or imposes a
financial burden on the primary government. For information regarding obtaining copies of the financial
statements of these component units, email the State Controller’s Office, Division of Accounting and
Reporting at StateGovReports@sco.ca.gov.
The nonmajor consolidated component units segments are:
California State University auxiliary organizations, which provide services primarily to university students
through foundations, associated student organizations, student unions, food service entities, book stores,
and similar organizations.
Financing authorities, which provide financing for specific purposes. These agencies include:
• The California Alternative Energy and Advanced Transportation Financing Authority, which provides
financing for alternative energy and advanced transportation technologies;
• The California Infrastructure and Economic Development Bank, which provides financing for business
development and public improvements; and
• The California Urban Waterfront Area Restoration Financing Authority, which provides financing for
coastal and inland urban waterfront restoration projects.
District agricultural associations, which exhibit all of the industries, industrial enterprises, resources, and
products of the state (the district agricultural association’s financial report is as of and for the year ended
December 31,2013).
Other component units, which include the following entities:
• The University of California Hastings College of the Law, which was established as the law department
of the University of California to provide legal education programs and operates independently under its
own board of directors. The college has a discretely presented component unit, the Foundation, which
provides private sources of funds for academic programs, scholarships, and faculty research;
• The State Assistance Fund for Enterprise, Business and Industrial Development Corporation, which
provides financial assistance to small business; and
• The Public Employees’ Contingency Reserve, which provides health benefit plans for state employees
and annuitants.
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State of California Comprehensive Annual Financial Report
4. Joint Venture
A joint venture is an entity resulting from a contractual arrangement; it is owned, operated, or governed by
two or more participants as a separate and specific activity subject to joint control. In such an arrangement,
the participants retain an ongoing financial interest or an ongoing financial responsibility in the entity. These
entities are not part of the primary government or a component unit.
The State participates in a joint venture called the Capitol Area Development Authority (CADA). CADA was
created in 1978 by the joint exercise of powers agreement between the primary government and the City of
Sacramento for the location of state buildings and other improvements. CADA is a public entity, separate
from the primary government and the city, and is administered by a board of five members: two appointed by
the primary government, two appointed by the city, and one appointed by the affirmative vote of at least three
of the other four members of the board. The primary government designates the chairperson of the board.
Although the primary government does not have an equity interest in CADA, it does have an ongoing
financial interest. The primary government subsidizes CADA’s operations by leasing land to CADA without
consideration; however, the primary government is not obligated to do so. At June 30, 2014, CADA had total
assets of $31.4 million, total liabilities of $19.7 million, and total net position of $11.7 million. Total revenues
for the fiscal year were $10.5 million and expenses were $11.3 million, resulting in a decrease in net position
of $800,000. Because the primary government does not have equity interest in CADA, CADA’s financial
information is not included in the financial statements of this report. Separately issued financial statements
may be obtained from the Capitol Area Development Authority, 1522 14th Street, Sacramento, California
95814-5958 or on its website at www.cadanet.org.
5. Related Organizations
A related organization is an organization for which a primary government is accountable because that
government appoints a voting majority of the organization’s governing board, but for which it is not
financially accountable.
Chapter 854 of the Statutes of 1996 created an Independent System Operator (ISO), a state-chartered,
nonprofit market institution. The ISO provides centralized control of the statewide electrical transmission grid
to ensure the efficient use and reliable operation of the transmission system. The ISO is governed by a
five-member board, the members of which are appointed by the Governor and confirmed by the Senate. The
State’s accountability for this institution does not extend beyond making the initial oversight board
appointments. Because the primary government is not financially accountable for the ISO, the financial
information of this institution is not included in the financial statements of this report. For information
regarding obtaining copies of the financial statements of the ISO, contact the Independent System Operator,
P.O. Box 639014, Folsom, California 95763-9014 or go to its website at www.caiso.com.
The California Earthquake Authority (CEA), a legally separate organization, offers earthquake insurance for
California homeowners, renters, condominium owners, and mobilehome owners. A three-member board of
state-elected officials governs the CEA. The State’s accountability for this institution does not extend beyond
making the appointments. Because the primary government is not financially accountable for the CEA, the
financial information of this institution is not included in the financial statements of this report. For
information regarding obtaining copies of the financial statements of the CEA, contact the California
Earthquake Authority, 801 K Street, Suite 1000, Sacramento, California 95814 or go to its website at
WWW. earthquakeauthority. com.
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Notes to the Financial Statements
The State Compensation Insurance Fund (State Fund) was established by the State of California through
legislation enaeted in 1913 to provide an available market for workers’ eompensation insurance to employees
located in California. State Fund operates in competition with other insurance carriers to serve California
businesses. The State appoints all 11 members of the State Fund’s governing board. The State’s accountability
for this institution does not extend beyond making the initial oversight board appointments. Because the
primary government is not financially accountable for the State Fund, the financial information of this
institution is not included in the financial statement of this report. For information regarding obtaining copies
of the financial statements of the State Fund, contact the State Compensation Insurance Fund, 333 Bush
Street, 8th Floor, San Francisco, California 94104 or go to its website at www.statefundca.com.
The California Health Benefit Exchange (the Exchange), an independent public entity, offers new health
insurance to individuals, families, and small businesses. A five-member board of state-elected officials
governs the Exchange. The State’s accountability for this institution does not extend beyond making the
appointments. Because the primary government is not financially accountable for the Exchange, the financial
information of this institution is not included in the financial statements of this report. For information
regarding obtaining copies of the financial statements of the Exchange, contact Covered California, P.O. Box
989725, West Sacramento, California 95798-9725.
The California Pollution Control Einancing Authority (CPCEA) was created through the California Pollution
Control Financing Authority Act of 1972. The CPCFA is a legally separate entity that provides financing for
pollution control facilities. A three-member board of state-elected officials governs the CPCFA. The State’s
accountability for this institution does not extend beyond making the appointments. Because the primary
government is not financially accountable for the CPCFA, the financial information of this institution is not
included in the financial statements of this report. For information regarding obtaining copies of the financial
statements of the CPCFA, contact the State Treasurer’s Office, 915 Capitol Mall, Room 457, Sacramento,
California 95814 or go to its website at www.treasurer.ca.gov/cpcfa.
The California Health Eacilities Einancing Authority (CHEEA) was established by the State of California
through legislation enacted in 1979. The CHFFA is a legally separate entity that provides financing for the
construction, equipping, and acquisition of health facilities. A nine-member board of state-elected officials
and appointees govern the CHFFA. The State’s accountability for this institution does not extend beyond
making the appointments. Because the primary government is not financially accountable for the CHFFA, the
financial information of this institution is not included in the financial statements of this report. For
information regarding obtaining copies of the financial statements of the CHFFA, contact the State Treasurer’s
Office, 915 Capitol Mall, Suite 590, Sacramento, California 95814 or go to its website at
www.treasurer.ca.gov/chffa.
The California Educational Eacilities Authority (CEEA) was created by Board of Control approval in 1974.
The CEFA is a legally separate entity established to issue revenue bonds to finance loans for students
attending public and private colleges and universities, and to assist private educational institutions of higher
learning in financing the expansion and construction of educational facilities. A five-member board of
state-elected officials and appointees govern the CEFA. The State’s accountability for this institution does not
extend beyond making the appointments. Because the primary government is not financially accountable for
the CEFA, the financial information of this institution is not included in the financial statements of this report.
For information regarding obtaining copies of the financial statements for the CEFA, contact the State
Treasurer’s Office, 915 Capitol Mall, Suite 590, Sacramento, California 95814 or go to its website at
www.treasurer.ca.gov/cefa.
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State of California Comprehensive Annual Financial Report
The California School Finance Authority (CSFA) was created in 1985. The CSFA is a legally separate entity
that provides loans to school and community college districts to assist them in obtaining equipment and
facilities. A three-member board of state officials governs the CSFA. The State’s accountability for this
institution does not extend beyond making the appointments. Because the primary government is not
financially accountable for the CSFA, the financial information for this institution is not included in the
financial statements of this report. For information regarding obtaining copies of the financial statements of
the CSFA, contact the State Treasurer’s Office, 304 South Broadway, Suite 550, Los Angeles, California
90013 or go to its website at www.treasurer.ca.gov/csfa/.
B. Government-wide and Fund Financial Statements
Government-wide financial statements (the Statement of Net Position and the Statement of Activities) provide
information on all of the nonfiduciary activities of the primary government and its component units. The
primary government is reported separately from legally separate component units for which the State is
financially accountable. Within the primary government, the State’s governmental activities, which are
normally supported by taxes and intergovernmental revenues, are reported separately from business-type
activities, which rely to a significant extent on fees and charges for support. The effect of interfund activity
has been removed from the statements, with the exception of amounts between governmental and
business-type activities, which are presented as internal balances and transfers. Centralized services provided
by the General Fund for other funds are charged as direct costs to the funds that received those services. Also,
the General Fund recovers the cost of centralized services provided to federal programs from the federal
government.
The Statement of Net Position reports all of the financial and capital resources of the government as a whole
in a format in which assets and deferred outflows of resources equal liabilities and deferred inflows of
resources, plus net position. The Statement of Activities demonstrates the degree to which the expenses of a
given function are offset by program revenues. Program revenues include charges to customers who purchase,
use, or directly benefit from goods, services, or privileges provided by a given function. Program revenues
also include grants and contributions that are restricted to meeting the operational or capital requirements of a
particular function. Taxes and other items that are not program-related are reported as general revenues.
Fund financial statements are provided for governmental funds, proprietary funds, fiduciary funds and similar
component units, and discretely presented component units. A fund is a fiscal and accounting entity with a
self-balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is
used to aid management in demonstrating compliance with finance-related legal and contractual provisions.
The State maintains the minimum number of funds consistent with legal and managerial requirements.
Fiduciary funds, although excluded from the government-wide statements, are included in the fund financial
statements. Major governmental and enterprise funds are reported in separate columns in the fund financial
statements. Nonmajor governmental and proprietary funds are grouped into separate columns. Discretely
presented component unit statements, which follow the fiduciary fund statements, also separately report the
enterprise activity of the major discretely presented component units. In this report, the enterprise activity of
nonmajor discretely presented component units is grouped in a separate column.
Governmental fund types are used to account for activities primarily supported by taxes, grants, and similar
revenue sources.
The State reports the following major governmental funds:
The General Fund is the main operating fund of the State. It accounts for transactions related to resources
obtained and used for those services that need not be accounted for in another fund.
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Notes to the Financial Statements
The Federal Fund accounts for the receipt and use of grants, entitlements, and shared revenues received
from the federal government that are all restricted by federal regulations.
The Transportation Fund accounts for fuel taxes, including the State’s diesel, motor vehicle, and fuel use
taxes; bond proceeds; automobile registration fees; and other revenues that are restricted for transportation
purposes, including highway and passenger rail construction and transportation safety programs.
The Environmental and Natural Resources Fund accounts for fees, bond proceeds, and other revenues that
are restricted for maintaining the State’s natural resources and improving the environmental quality of its
air, land, and water.
Proprietary fund types focus on the determination of operating income, changes in net position, financial
position, and cash flows.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues
and expenses generally result from providing services and producing and delivering goods in connection with
a proprietary fund’s principal ongoing operations. Operating expenses include the cost of sales and services,
administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this
definition are reported as nonoperating revenues and expenses. For its proprietary funds, the State applies all
applicable GASB pronouncements.
The State has two proprietary fund types: enterprise funds and internal service funds.
Enterprise funds record business-type activity for which a fee is charged to external users for goods and
services. In addition, the State is required to report activities as enterprise funds in the context of the activity’s
principal revenue sources when any of the following criteria are met:
• The activity’s debt is secured solely by fees and charges of the activity;
• There is a legal requirement to recover costs; or
• The pricing policies of fees and charges are designed to recover costs.
The State reports the following major enterprise funds:
The Electric Power Fund accounts for the acquisition and resale of electric power to retail end-use
customers.
The Water Resources Fund accounts for charges to local water districts and the sale of excess power to
public utilities.
The State Lottery Fund accounts for the sale of California State Lottery (Lottery) tickets and the Lottery’s
payments for education.
The Unemployment Programs Fund accounts for employer and worker contributions used for payments of
unemployment insurance and disability benefits.
The California State University Fund accounts for student fees and other receipts from gifts, bequests,
donations, federal and state grants, and loans that are used for educational purposes.
Nonmajor enterprise funds account for additional operations that are financed and operated in a manner
similar to private business enterprises.
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State of California Comprehensive Annual Financial Report
Additionally, the State reports internal service funds as a proprietary fund type with governmental aetivity.
Internal service funds account for goods or services provided to other agencies, departments, or governments
on a cost-reimbursement basis. The goods and services provided include: architectural services, public
building construction and improvements, printing and procurement services, goods produced by inmates of
state prisons, data processing services, and administrative services related to water delivery. Internal service
funds are included in the governmental activities at the government-wide level.
Fiduciary fund types are used to account for assets held by the State. The State acts as a trustee or as an
agent for individuals, private organizations, other governments, or other funds. Fiduciary funds, including
fiduciary component units, are not included in the government-wide financial statements.
The State has the following four fiduciary fund types:
Private purpose trust funds account for all trust arrangements, other than those properly reported in pension
or investment trust funds, whereby principal and income benefit individuals, private organizations, or other
governments. The following are the State’s largest private purpose trust funds:
The Scholarshare Program Trust Fund accounts for money received from participants to fund their
beneficiaries’ higher education expenses at certain postsecondary educational institutions.
The Unclaimed Property Fund accounts for unclaimed money and properties held in trust by the State.
Unclaimed property is remitted to the General Fund where it can be used by the State until it is claimed.
Pension and other employee benefit trust funds of the primary government and fiduciary component units
account for transactions, assets, liabilities, and net position available for plan benefits of the retirement
systems and for other employee benefit programs.
An investment trust fund accounts for the deposits, withdrawals, and earnings of the Local Agency
Investment Fund, an external investment pool for local governments and public agencies.
Agency funds account for assets held by the State, which acts as an agent for individuals, private
organizations, or other governments. The following are the State’s largest agency funds:
The Receipting and Disbursing Fund accounts for the collection and disbursement of revenues and
receipts on behalf of local governments. This fund also accounts for receipts from numerous state funds,
typically for the purpose of writing a single warrant when the warrant is funded by multiple funding
sources.
The Deposit Fund accounts for various deposits, such as those from condemnation and litigation
proceedings.
Discretely presented component units consist of certain organizations that have enterprise activity. The
enterprise activity component units are the University of California, the California Housing Finance Agency,
and nonmajor component units. In this report, all of the enterprise activity of the discretely presented
component units is reported in a separate column in the government-wide financial statements and on separate
pages following the fund financial statements.
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C. Measurement Focus and Basis of Accounting
1. Government-wide Financial Statements
Notes to the Financial Statements
The government-wide financial statements are reported using the economic resources measurement focus and
the accrual basis of accounting. Revenues are recorded when they are earned and expenses are recorded when
a liability is incurred, regardless of the timing of related cash flows. Grants and similar transactions are
recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
2. Fund Financial Statements
The measurement focus and basis of accounting for the fund financial statements vary with the type of fund.
Governmental fund types are presented using the current financial resources measurement focus. With this
measurement focus, operating statements present increases and decreases in net current assets; the unassigned
fund balance is a measure of available spendable resources.
The accounts of the governmental fund types are reported using the modified accrual basis of accounting.
Under the modified accrual basis, revenues are recorded as they become measurable and available, and
expenditures are recorded at the time the liabilities are incurred. The State records revenue sources when they
are earned or when they are due, provided they are measurable and available within the ensuing 12 months.
When an asset is recorded in a governmental fund statement, but the revenue is not available per the criterion
described herein, the State reports a deferred inflow of resources until such time the revenue becomes
available. Principal tax revenues susceptible to accrual are recorded as taxpayers earn income (personal
income and corporation taxes), as sales are made (consumption and use taxes), and as the taxable event occurs
(miscellaneous taxes), net of estimated tax overpayments.
Proprietary fund types, the investment trust fund, private purpose trust funds, and pension and other
employee benefit trust funds are accounted for using the economic resources measurement focus. Agency
funds are custodial in nature and do not measure the results of operations.
The accounts of the proprietary fund types, the investment trust fund, private purpose trust funds, pension and
other employee benefit trust funds, and agency funds are reported using the accrual basis of accounting.
Under the accrual basis, most transactions are recorded when they occur, regardless of when cash is received
or disbursed.
Lottery revenue and the related prize expenses are recognized when sales are made. Certain prizes are payable
in deferred installments. Such liabilities are recorded at the present value of amounts payable in the future.
For purposes of the Statement of Cash Flows, all cash and pooled investments in the State Treasurer’s pooled
investment program are considered to be cash and cash equivalents.
Discretely presented component units are accounted for using the economic resources measurement focus
and the accrual basis of accounting.
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State of California Comprehensive Annual Financial Report
D. Cash and Investments
The State considers cash and pooled investments, for the purpose of the Statement of Cash Flows, as cash and
cash equivalents. Cash and cash equivalents are considered to be cash on hand, deposits in the State’s pooled
investment program, restricted cash and pooled investments for debt service, construction and operations,
restricted cash on deposit with fiscal agents (for example, revenue bond trustees), and highly liquid
investments with an original maturity date of three months or less.
The State reports investments at fair value, as prescribed by GAAP. Additional information on the State’s
investments can be found in Note 3, Deposits and Investments.
E. Receivables
Amounts are aggregated into a single receivables account net of allowance for uncollectible amounts. The
detail of the primary government’s accounts receivable can be found in Note 4, Accounts Receivable.
F. Inventories
Inventories of supplies are reported at cost and inventories held for resale are stated at the lower of average
cost or market. In the government-wide financial statements, inventories for both governmental and
business-type activities are expensed when they are consumed and unused inventories are reported as an asset
on the Statement of Net Position. In the fund financial statements, governmental funds report inventories as
expenditures when purchased, and proprietary funds report inventories as expenditures when consumed. The
discretely presented component units have inventory policies similar to those of the primary government.
G. Net Investment in Direct Financing Leases
The State Public Works Board accounts for its activities in the Public Buildings Construction Fund, an
internal service fund, and has entered into lease-purchase agreements with various other primary government
agencies and certain local agencies. The payments from these leases are used to satisfy the principal and
interest requirements of revenue bonds issued by the State Public Works Board to finance the cost of projects
such as acquisition and construction of facilities and equipment. Upon expiration of these leases, title to the
facilities and projects transfers to the primary government agency or the local agency. The State Public Works
Board records the net investment in direct financing leases at the net present value of the minimum lease
payments in the internal service fund financial statements. As the majority of this lease receivable is from
governmental funds, it is eliminated within the governmental activities column of the government-wide
Statement of Net Position.
The California State University System (CSU) accounts for its lease activities in the California State
University Fund, a major enterprise fund, and has entered into 30-year capital lease agreements with certain
auxiliary organizations. These agreements lease existing and newly constructed facilities to the CSU auxiliary
organizations. A portion of the proceeds from certain revenue bonds issued by CSU were used to finance the
construction of these facilities.
H. Long-term Prepaid Charges
The long-term prepaid charges account in the enterprise funds primarily represents operating and maintenance
costs that will be recognized in the Water Resources Fund as expenses over the remaining life of long-term
state water supply contracts. These costs are billable in future years. In addition, the account includes unbilled
interest earnings on unrecovered capital costs that are recorded as long-term prepaid charges. These charges
78
Notes to the Financial Statements
are recognized when billed in the future years under the terms of water supply contracts. The long-term
prepaid charges for the Public Buildings Construction Fund include prepaid insurance costs on revenue bonds
issued. Long-term prepaid charges are also included in the State Lottery Fund and nonmajor enterprise funds.
These prepaid charges are incurred in cormection with certain contracts that extend beyond a one-year period,
which are amortized as expenses over the remaining life of the contracts. In the government-wide financial
statements, the prepaid charges for governmental activities includes prepaid insurance costs on revenue bonds
issued.
I. Capital Assets
Capital assets are categorized into land, state highway infrastructure, collections, buildings and other
depreciable property, intangible assets, and construction in progress. The buildings and other depreciable
property account includes buildings, improvements other than buildings, equipment, certain infrastructure
assets, certain books, and other capitalized and depreciable property. Intangible assets include computer
software, land use rights, patents, copyrights, and trademarks. The value of the capital assets, including the
related accumulated depreciation and amortization, is reported in the applicable governmental, business-type,
or component unit activities colu mns in the government-wide Statement of Net Position.
The primary government has a large collection of historical and contemporary treasures that have important
documentary and artistic value. These assets are not capitalized or depreciated because they are cultural
resources and cannot reasonably be valued and/or the assets have inexhaustible useful lives. These treasures
and works of art include furnishings, portraits and other paintings, books, statues, photographs, and
miscellaneous artifacts. These collections meet the conditions for exemption from capitalization because the
collections are: held for public exhibition, education, or research in furtherance of public service, rather than
financial gain; protected, kept unencumbered, cared for, and preserved; and subject to an organizational policy
that requires the proceeds from sales of collection items to be used to acquire other items for collections.
In general, capital assets of the primary government are defined as assets that have a normal useful life of at
least one year and a unit cost of at least $5,000. These assets are recorded at historical cost or estimated
historical cost, including all costs related to the acquisition. Donated capital assets are recorded at the fair
market value on the date the gift was received. Major capital asset outlays are capitalized as projects are
constructed.
Buildings and other depreciable or amortizable capital assets are depreciated using the straight-line method
with no salvage value for governmental activities. Generally, buildings and other improvements are
depreciated over 40 years, equipment is depreciated over five years, and intangible assets are amortized over
10 to 20 years. Depreciable or amortizable assets of business-type activities are depreciated or amortized
using the straight-line method over their estimated useful or service lives, ranging from three to 100 years.
California has elected to use the modified approach for capitalizing the infrastructure assets of the state
highway system. The state highway system is maintained by the California Department of Transportation. By
using the modified approach, the infrastructure assets of the state highway system are not depreciated and all
expenditures made for those assets, except for additions and improvements, are expensed in the period
incurred. All additions and improvements made after June 30, 2001, are capitalized. All infrastructure assets
that are related to projects completed prior to July 1, 2001, are recorded at the historical costs contained in
annual reports of the American Association of State Highway and Transportation Officials and the Federal
Highway Administration.
The capital assets of the discretely presented component units are reported at cost at the date of acquisition or
at fair market value at the date of donation, in the case of gifts. They are depreciated or amortized over their
estimated useful service lives.
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State of California Comprehensive Annual Financial Report
J. Long-term Obligations
Long-term obligations consist of certain unmatured general obligation bonds, certain unmatured revenue
bonds, capital lease obligations, certificates of participation, commercial paper, the net pension obligation of
the pension and other employee benefit trust funds, the net other postemployment benefits obligation (OPEB),
the liability for employees’ compensated absences and workers’ compensation claims, pollution remediation
obligations, amounts owed for lawsuits, reimbursement for costs mandated by the State, the outstanding
Proposition 98 funding guarantee owed to schools, the liability for Lottery prizes and annuities, loans from
other governments and fiduciary funds, and the primary government’s share of the University of California
pension liability that is due in more than one year. In the government-wide financial statements, current and
noncurrent obligations are reported as liabilities in the applicable governmental activities, business-type
activities, and component units columns of the Statement of Net Position.
Pollution remediation obligations are recorded by the State when one or more of the GASB Statement No. 49
obligating events have occurred and when a reasonable estimate of the remediation cost is available. These
liabilities are measured using actual contract costs, where no change in cost is expected, or the expected cash
flow technique. The remediation obligation estimates that appear in this report are subject to change over
time. Cost may vary due to price fluctuations, changes in technology, changes in potential responsible parties,
results of environmental studies, changes to statutes or regulations, and other factors that could result in
revisions to these estimates. Prospective recoveries from responsible parties may reduce the State’s obligation.
Bond premiums and discounts for business-type activities and component units are deferred and amortized
over the life of the bonds. In these instances, bonds payable is reported net of the applicable premium and
discount. Bond premiums and discounts for governmental funds are reported as other financing sources
(uses). However, in the government-wide financial statements, the bonds payable for governmental activities
is reported net of the applicable unamortized premium and discount. Bond issuance costs, excluding prepaid
insurance, are expensed when incurred.
With advance approval from the Legislature, certain authorities and state agencies may issue revenue bonds.
Principal and interest on revenue bonds are payable from the pledged revenues of the respective funds,
building authorities, and agencies. The General Fund has no legal liability for payment of principal and
interest on revenue bonds. With the exception of certain special revenue funds (Transportation and the Golden
State Tobacco Securitization Corporation) and the building authorities capital projects fund, the liability for
revenue bonds is recorded in the respective fund.
K. Compensated Absences
The government-wide financial statements report both the current and the noncurrent liabilities for
compensated absences, which are vested unpaid vacation, armual leave, and other paid leave programs.
However, unused sick-leave balances are not included in the compensated absences because they do not vest
to employees. In the governmental fund financial statements, only the compensated absences liability for
employees who have left state service and have unused reimbursable leave at year end is included. The
amounts of vested unpaid vacation and annual leave accumulated by state employees are accrued in
proprietary funds when incurred. In the discretely presented component units, the compensated absences are
accounted for in the same manner as in the proprietary funds of the primary government.
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Notes to the Financial Statements
L. Deferred Outflows and Deferred Inflows of Resources
The government-wide and fund fmaneial statements report deferred outflows of resourees and deferred
inflows of resourees.
1. Deferred Outflows of Resources
Deferred outflows of resourees are the eonsumption of assets that are applieable to future reporting periods.
Deferred outflows of resourees are presented separately after “Total Assets” in the Balanee Sheet and
Statement of Net Position.
The State’s deferred outflows of resourees eonsist of the following transaetions:
• Loss on Refunding of Debt: The defeasanee of previously outstanding general obligation and revenue
bonds resulted in deferred refunding losses for governmental aetivities, business-type aetivities, and
eomponent units. These deferred losses are recognized as a component of interest expense over the
remaining life of the old debt or the life of the new debt, whichever is shorter.
• Decrease in Fair Value of Hedging Derivatives: Negative changes in the fair value of hedging
derivatives are reported for business-type activities and component units.
• Net Pension Liability: The University of California, a discretely presented component unit, reports the
decreases in its net pension liability that were not included in its pension expense as deferred outflows of
resources. Also, employer contributions subsequent to the measurement date of the net pension liability
are reported as deferred outflows of resources.
2. Deferred Inflows of Resources
Deferred inflows of resources are the acquisition of assets that are applicable to future reporting periods.
Deferred inflows of resources are presented separately after “Total Liabilities” in the Balance Sheet and
Statement of Net Position.
The State’s deferred inflows of resources consist of the following transactions:
• Gain on Refunding of Debt: The defeasance of previously outstanding general obligation and revenue
bonds resulted in deferred refunding gains for governmental activities and discretely presented
component units. These deferred gains are recognized as a component of interest expense over the
remaining life of the old debt or the life of the new debt, whichever is shorter.
• Service Concession Arrangements: The State and its component units have entered into service
concession arrangements with third parties for park facility services, student housing, and certain other
services. The upfront payment received or present value of installment payments expected to be received
from the third parties are reported as deferred inflows of resources.
• Net Pension Liability: The University of California reports the increases in its net pension liability that
were not included in pension expense as deferred inflows of resources.
• Other Deferred Inflows of Resources: Revenues generated from current rates charged by regulated
business-type activities that are intended to recover costs expected to be incurred in the future are
reported in the government-wide Statement of Net Position. Revenues that are earned and measurable,
but not available within 12 months of the end of the reporting period, are reported in the governmental
funds’ balance sheet.
81
State of California Comprehensive Annual Financial Report
M. Abnormal Account Balances
In the 2013-14 fiscal year, the Water Resources Electric Power Fund had a net refund of $44 million of power
charges revenue. The refund resulted from lower power sales, return of prior year over-collection, and return
of reserves as lower levels of reserve were required. During the 2013-14 fiscal year, the fund returned
$93 million through adjustments to power charges and through separate monthly payments to its ratepayers.
N. Nonmajor Enterprise Segment Information
Two nonmajor enterprise fund segments are displayed discretely in the Combining Statement of Net Position;
the Combining Statement of Revenues, Expenses, and Changes in Fund Net Position; and the Statement of
Cash Flows of the nonmajor enterprise funds. A segment is an identifiable activity reported as or within an
enterprise fund or another stand-alone entity for which debt is outstanding and a revenue stream has been
pledged in support of that debt. In addition, to qualify as a segment, an activity must be subject to an external
requirement to separately account for revenues, expenses, gains and losses, assets and deferred outflows of
resources, and liabilities and deferred inflows of resources. All of the activities reported for the fund segments
listed below meet these requirements.
State Water Pollution Control Revolving Fund: Interest charged on loans to communities for construction of
water pollution control facilities and projects.
Housing Loan Fund: Interest payments from low-interest, long-term farm and home mortgage loan
contracts to eligible veterans living in California.
O. Net Position and Fund Balance
The difference between fund assets, deferred outflows of resources, liabilities, and deferred inflows of
resources is called “net position” on the government-wide financial statements, the proprietary and fiduciary
fund statements, and the component unit statements; it is called “fund balance” on the governmental fund
statements. The government-wide financial statements include the following categories of net position:
Net investment in capital assets, represents capital assets, net of accumulated depreciation, reduced by the
outstanding debt attributable to the acquisition, construction, or improvement of those assets.
Restricted net position results from transactions with purpose restrictions and is designated as either
nonexpendable or expendable. Nonexpendable restricted net position is subject to externally imposed
restrictions that must be retained in perpetuity. Expendable restricted net position is subject to externally
imposed restrictions that can be fulfilled by actions of the State. As of June 30, 2014, the government-wide
financial statements show restricted net position for the primary government of $28.9 billion, of which
$6.8 billion is due to enabling legislation.
Unrestricted net position is neither restricted nor invested in capital assets.
In the fund financial statements, proprietary funds include categories of net position similar to those in the
government-wide financial statements. Fund balance amounts for governmental funds are reported as
nonspendable, restricted, committed, assigned, or unassigned.
Nonspendable fund balance includes amounts that cannot be spent because they are not in spendable form
(inventories; prepaid amounts; long-term portion of loans or notes receivable; or property held for resale
82
Notes to the Financial Statements
unless the proceeds are restricted, committed, or assigned) or they are legally or contractually required to
remain intact.
Restricted fund balance has constraints placed upon the use of the resources either by an external party
(creditors, grantors, contributors, or laws and regulations of other governments) or through a constitutional
provision or enabling legislation.
Committed fund balance can be used only for specific purposes pursuant to constraints imposed by a formal
action of the State’s highest level of decision-making authority, the California State Legislature. The formal
action that commits fund balance to a specific purpose occurred prior to the end of the reporting period, but
the amount subject to the constraint may be determined in a subsequent period. Committed fund balance
should incorporate contractual obligations to the extent that existing resources in the fund have been
specifically committed for use in satisfying those contractual requirements.
Assigned fund balance: California does not have a formal policy to delegate authority to assign resources.
However, fund balance can be classified as assigned when a purchase order creates an outstanding
encumbrance amount, unless the purchase order relates to restricted or committed resources. Furthermore,
all resources in governmental funds, other than the General Fund, that are not reported as nonspendable,
restricted, or committed are classified as assigned for the purpose of the respective funds.
Unassigned fund balance is the residual amount of the General Fund not included in the four classifications
described above. In other governmental funds in which expenditures incurred for specific purposes
exceeded amounts restricted, committed, or assigned to those purposes, a negative unassigned fund balance
is reported.
Fund balance spending order. For the purpose of reporting fund balance in this financial report under
GASB Statement No. 54, the State considers resources to be spent in the following order when an
expenditure is incurred for which these classifications are available: restricted, committed, assigned, and
unassigned.
Fiduciary fund net position is amounts held in trust for benefits and other purposes.
P. Restatement of Beginning Fund Baiances and Net Position
1. Fund Financial Statements
The beginning fund balance of governmental funds decreased by a net total of $566 million. This decrease is
comprised of an understatement of $444 million for education expenditures that support community colleges
and an overstatement of $357 million of retail sales tax revenue in the General Fund, and the following
restatements in nonmajor governmental funds:
• $212 million increase as a result of a change in the tobacco settlement revenue recognition methodology
in the Golden State Tobacco Securitization Corporation Fund;
• $26 million increase due to the understatement of retail sales tax revenue in the Economic Recovery
Bond Sinking Fund; and
• $3 million decrease due to the movement of a fund previously reported within the Financing for Local
Governments and the Public special revenue fund that is now administered by a discretely presented
component unit reported within the financing authorities consolidated nonmajor component unit
segment.
83
State of California Comprehensive Annual Financial Report
The beginning net position of the internal service funds inereased by $419 million. Thi s inerease is eomprised
of $368 million, as adjusted for capitalized interest of $11.8 million, due to the reclassification of the Public
Building Construction Fund from an enterprise fund to an internal service fund. The remaining $51 million
increase resulted from understated capital assets and understated revenue in the Financial Information
Systems Fund.
The beginning net position of the enterprise funds decreased by $616 million. The decrease is comprised of
the $380 million prior year net position of the Public Buildings Construction Fund that was reclassified from
an enterprise fund to an internal service fund and the $236 million transfer of capital lease obligation from
governmental activities to the California State University Fund, a major enterprise fund.
Beginning net position of the discretely presented component units decreased by $6.3 billion. This decrease is
primarily the result of the University of California’s implementation of GASB Statement No. 65 and GASB
Statement No. 68, as well as a change in its reporting entity. Further information related to these restatements
is included in the University’s separately issued financial statements which can be obtained from the
University on its website at www.ucop.edu. In addition, other component units had small restatements to their
beginning net position as follows:
• $39 million increase for understated loans receivable of the California Housing Finance Agency,
• $6 million decrease for OPEB obligation and other adjustments of the California State University
Auxiliary Organizations',
• $3 million increase due to the movement of a fund previously reported as a special revenue fund by the
primary government to the financing authorities consolidated nonmajor component unit segment; and
• $239,000 net increase for the implementation of GASB 65, understated liabilities, and unrecorded
capital assets for the district agricultural associations.
2 . Government-wide Financial Statements
The beginning net position of the governmental activities increased by $2.3 billion. In addition to the amounts
described in the previous section for governmental funds, the restatement comprises a $2.2 billion increase for
understated capital assets and the $236 million increase for the transfer from governmental activities of capital
lease obligations of the California State University Fund described in the previous section for enterprise
funds.
The beginning net position of business-type activities and component units were restated as described in the
previous section for enterprise funds and discretely presented component units, respectively.
Q. Guaranty Deposits
The State is the custodian of guaranty deposits held to protect consumers, to secure the State’s deposits in
financial institutions, and to ensure payment of taxes and fulfillment of obligations to the State. Guaranty
deposits of securities and other properties are not shown on the financial statements.
84
Notes to the Financial Statements
NOTE 2: BUDGETARY AND LEGAL COMPLIANCE
A. Budgeting and Budgetary Control
The State’s annual budget is prepared primarily on a modified acerual basis for governmental funds. The
Governor reeommends a budget for approval by the Legislature eaeh year. This reeommended budget ineludes
estimated revenues, but revenues are not ineluded in the annual budget bill adopted by the Legislature. Under
state law, the State eannot adopt a spending plan that exeeeds estimated revenues.
Under the State Constitution, money may be drawn from the treasury only through a legal appropriation. The
appropriations eontained in the Budget Act, as approved by the Legislature and signed by the Governor, are
the primary sources of annual expenditure authorizations and establish the legal level of control for the annual
operating budget. The budget can be amended throughout the year by special legislative action, budget
revisions by the Department of Finance, or executive orders of the Governor. Amendments to the original
budget for the year ended June 30, 2014, increased spending authority for the budgetary/legal basis reported
General Fund, and decreased spending authority for the Environmental and Natural Resources Funds and
Transportation Funds.
Appropriations are generally available for expenditure or encumbrance either in the year appropriated or for a
period of three years if the legislation does not specify a period of availability. At the end of the availability
period, the encumbering authority for the unencumbered balance lapses. Some appropriations continue
indefinitely, while others are available until fully spent. Generally, encumbrances must be liquidated within
two years from the end of the period in which the appropriation is available. If the encumbrances are not
liquidated within this additional two-year period, the spending authority for these encumbrances lapses.
B. Legal Compliance
State agencies are responsible for exercising basic budgetary control and ensuring that appropriations are not
overspent. The State Controller’s Office is responsible for overall appropriation control and does not allow
expenditures in excess of authorized appropriations.
Financial activities are mainly controlled at the appropriation level but can vary, depending on the
presentation and wording contained in the Budget Act. The Budget Act appropriations are identified by
department, reference item, and fund. The annual appropriated budget may establish detailed allocations to
specific programs, projects, or sources of reimbursement within an appropriation. The Department of Finance
can authorize adjustments between the detail allocations but cannot increase the amount of the overall
appropriation. While the financial activities are controlled at various levels, the legal level of budgetary
control—the extent to which management may amend the budget without seeking approval of the governing
body—has been established in the Budget Act for the annual operating budget.
The Budgetary Comparison Schedule is not presented in this document at the legal level of budgetary control
because such a presentation would be extremely lengthy and cumbersome. The State of California prepares a
separate report, the Comprehensive Annual Financial Report Supplement, which includes statements that
demonstrate compliance with the legal level of budgetary control in accordance with Government Accounting
Standards Board’s Codification of Governmental Accounting and Financial Reporting Standards, Section
2400.121. The supplement includes the comparison of the annual appropriated budget with expenditures at the
legal level of control. A copy of the Comprehensive Armual Financial Report Supplement is available upon
request by emailing the State Controller’s Office, Division of Accounting and Reporting at
StateGovReports@sco.ca.gov.
85
State of California Comprehensive Annual Financial Report
NOTE 3: DEPOSITS AND INVESTMENTS
Cash balances not required for immediate use are invested by the State Treasurer. The State Treasurer
administers a single pooled investment program comprising both an internal investment pool and an external
investment pool (the Local Agency Investment Fund). A single portfolio of investments exists, with all
participants having an undivided interest in the portfolio. Both pools are administered in the same manner.
A. Primary Government
1. Control of State Funds
The State’s pooled investment program and certain funds of the primary government are allowed by state
statutes, bond resolutions, and investment policy resolutions to invest in United States government securities,
federal agency securities, negotiable certificates of deposit, bankers’ acceptances, commercial paper,
corporate bonds, bank notes, other debt securities, repurchase agreements, reverse repurchase agreements, and
other investments.
Certain discretely presented component units and a related organization participate in the State Treasurer’s
Office pooled investment program. As of June 30, 2014, the discretely presented component units and the
related organization account for approximately 3.2% of the State Treasurer’s pooled investment portfolio.
This program enables the State Treasurer’s Office to combine available cash from all funds and to invest cash
that exceeds current needs.
Both deposits and investments are included in the State’s investment program. For certain banks, the State
Treasurer’s Office maintains cash deposits that cover uncleared checks deposited in the State’s accounts and
that earn income that compensates the banks for their services.
Demand and time deposits held by financial institutions as of June 30, 2014, totaling approximately
$7.3 billion, were insured by federal depository insurance or by collateral held by the State Treasurer’s Office
or an agent of the State Treasurer’s Office in the State’s name. The California Government Code requires that
collateral pledged for demand and time deposits be deposited with the State Treasurer.
As of June 30, 2014, the State Treasurer’s Office had on deposit with a fiscal agent amounts totaling
$19 million related to principal and interest payments to bondholders. These deposits were insured by federal
depository insurance or by collateral held by an agent of the State Treasurer’s Office in the State’s name.
Certain funds have elected to participate in the pooled investment program even though they have the
authority to invest on their own. Others may be required by legislation to participate in the program; as a
result, the deposits of these funds may be considered involuntary. However, these funds are part of the State’s
reporting entity. The remaining participant in the pool, the Local Agency Investment Fund, is voluntary.
Certain funds that have deposits in the State Treasurer’s pooled investment program do not receive the interest
earnings on their deposits. Instead, by law, the earnings are assigned to the State’s General Fund. Most of the
$ 16 million in interest revenue received by the General Fund from the pooled investment program in fiscal
year 2013-14 was earned on balances in these funds.
Enterprise funds and special revenue funds also make separate investments, which are presented at fair value.
86
Notes to the Financial Statements
2. Valuation of State Investments
The State Treasurer’s Office reports its investments at fair value. The fair value of securities in the State
Treasurer’s pooled investment program generally is based on quoted market prices. The State Treasurer’s
Office performs a quarterly fair market valuation of the pooled investment program portfolio. In addition, the
State Treasurer’s Office performs a monthly fair market valuation of all securities held against carrying cost.
These valuations can be obtained from the State Treasurer’s Office website at www.treasurer.ca.gov.
As of June 30, 2014, the weighted average maturity of the securities in the pooled investment program
administered by the State Treasurer’s Office was approximately 239 days. Weighted average maturity is the
average number of days, given a dollar-weighted value of individual investments, that the securities in the
portfolio have remaining from evaluation date to stated maturity.
3. Oversight of Investing Activities
The Pooled Money Investment Board (PMIB) provides oversight of the State Treasurer’s pooled investment
program. The purpose of the board is to design and administer an effective cash management and investment
program, using all monies flowing through the State Treasurer’s Office bank accounts and keeping all
available funds invested in a ma nn er consistent with the goals of safety, liquidity, and yield. The PMIB is
comprised of the State Treasurer as chair, the State Controller, and the Director of Finance. This board
designates the amounts of money available for investment. The State Treasurer is charged with making the
actual investment transactions for this program. This investment program is not registered with the Securities
and Exchange Commission as an investment company.
The value of the deposits in the State Treasurer’s pooled investment program, including the Local Agency
Investment Fund, is equal to the dollars deposited in the program. The fair value of the position in the
program may be greater or less than the value of the deposits, with the difference representing the unrealized
gain or loss. As of June 30, 2014, this difference was immaterial to the valuation of the program. The pool is
run with “dollar-in, dollar-out” participation. There are no share-value adjustments to reflect changes in fair
value.
The State Treasurer’s pooled investment program values participants’ shares on an amortized cost basis.
Specifically, the program distributes income to participants quarterly, based on their relative participation
during the quarter. This participation is calculated based on (1) realized investment gains and losses calculated
on an amortized cost basis, (2) interest income based on stated rates (both paid and accrued), (3) amortization
of discounts and premiums on a straight-line basis, and (4) investment and administrative expenses. This
amortized cost method differs from the fair value method used to value investments in these financial
statements; the amortized cost method is not designed to distribute to participants all unrealized gains and
losses in the fair value of the pool’s investments. Because the total difference between the fair value of the
investments in the pool and the value distributed to pool participants using the amortized cost method
described above is not material, no adjustment was made to the financial statements. The State Treasurer’s
Office also reports participant fair value as a ratio of amortized cost on a quarterly basis. The State Treasurer’s
Office has not provided or obtained a legally binding guarantee to support the principal invested in the
investment program.
As of June 30, 2014, medium-term asset-backed securities comprised approximately 1.19% of the pooled
investments. The asset-backed securities consist of mortgage-backed securities. Small Business
Administration (SBA) pools, and asset-backed commercial paper. The mortgage-backed securities are called
real estate mortgage investment conduits (REMICs), and are securities backed by pools of mortgages. The
REMICs in the State’s portfolio have a fixed principal payment schedule. A portion of the asset-backed
securities consisted of floating-rate SBA notes. For floating-rate SBA notes held in the portfolio during the
87
State of California Comprehensive Annual Financial Report
fiscal year, the interest received by the State Treasurer’s pooled investment program rose or fell as the
underlying index rate rose or fell. The structure of the floating-rate SBA notes in the State Treasurer’s pooled
investment program portfolio provided a hedge against the risk of increasing interest rates. A portion of the
asset-backed portfolio holdings were short-term, asset-backed commercial paper (ABCP), which represented
0.84% of the pooled investments.
Table 1 identifies the investment types that are authorized by the California Government Code and the State
Treasurer’s Office investment policy for the pooled investment program. Maturities are limited by the State
Treasurer’s Office Investment Policy for the Pooled Money Investment Program. For commercial paper, the
Investment Policy is more restrictive than the Government Code. For corporate bonds and notes, the
Government Code requires that a security fall within the top three ratings of a nationally recognized statistical
ratings organization (NASRO). Items reported as N/A have no limitation in either the Government Code or
the State Treasurer’s Office Investment Policy.
Table 1
Authorized Investments
Authorized Investment Type
Maximum
Maturity
Maximum
Percentage
of Portfolio
Maximum
Investment
in One Issuer
Credit
Rating
U.S. Treasury securities
5 years
N/A
N/A
N/A
Federal agency and supranational securities
5 years
N/A
N/A
N/A
Certificates of deposit
5 years
N/A
N/A
N/A
Bankers acceptances
180 days
N/A
N/A
N/A
Commercial paper
180 days
30%
10 % of issuer’s outstanding
Commercial Paper
A-2/P-2/F-2
Corporate bonds/notes
5 years
N/A
N/A
A-/A3/A-
Repurchase agreements
1 year
N/A
N/A
N/A
Reverse repurchase agreements
1 year
10%
N/A
N/A
4. Risk of Investments
The following types of risks are common in deposits and investments, including those of the State:
Interest Rate Risk is the risk that the value of fixed-income securities will decline because of changing
interest rates. The prices of fixed-income securities with longer time to maturity tend to be more sensitive
to changes in interest rates than those with shorter durations.
Credit Risk is the risk that a debt issuer will fail to pay interest or principal in a timely manner, or that
negative perceptions of the issuer’s ability to make these payments will cause security prices to decline.
Custodial Credit Risk is the risk that, in the event a financial institution or counterparty fails, the investor
will not be able to recover the value of deposits, investments, or collateral.
Concentration of Credit Risk is the risk of loss attributed to the magnitude of an investor’s holdings in a
single issuer.
88
Foreign Currency Risk is the risk that changes in exchange rates will adversely affect the fair value of an
investment or a deposit.
Notes to the Financial Statements
a. Interest Rate Risk
Table 2 presents the interest rate risk of the primary government’s investments. In ealeulating SBA holdings’
weighted average maturity, the State Treasurer’s Offiee assumes that stated maturity is the quarterly reset date.
Total pooled investments do not inelude $4.8 billion of time deposits and $314 million of internal loans to
state funds. Repurehase agreements of the California State University system mature in one day. Most
mortgage-baeked seeurities are issued by U.S. government ageneies, or government-sponsored enterprises
sueh as the Federal National Mortgage Association, and entitle the purchaser to receive a share of the cash
flows, such as principal and interest payments, from a pool of mortgages. Mortgage-backed securities are
highly sensitive to interest rate changes because principal prepayments either increase (in a low interest rate
environment) or decrease (in a high interest rate environment) the security yield. As of June 30, 2014, only
$130 million, or 0.22% of the total pooled investments, was invested in mortgage-backed securities.
Table 2
Schedule of Investments - Primary Government - Interest Rate Risk
June 30, 2014
(amounts in thousands)
Weighted
Average
Pooled investments
U.S. Treasury bills and notes.
U.S. Agency bonds and discount notes.
Supranatural debentures and discount notes (IBRD)
Small Business Administration loans.
Mortgage-backed securities.
Certificates of deposit.
Bank notes.
Commercial paper.
Total pooled investments.
Other primary government investments
U.S. Treasuries and agencies.
Commercial paper.
Guaranteed investment contracts.
Corporate debt securities.
Repurchase agreements.
Other.
Total other primary government investments
Funds outside primary government included in pooled investments
Less: investment trust funds. 21,104,087
Less: other trust and agency funds. 1,750,530
Less: discretely presented component units and related organizations. . 1,901,592
Total primary government investments. $ 39,725,090
2,285,376 2.58
252,683 0.73
210,327 8.66
1,011,356 2.08
2,274 0.00
953,463 3.49
4,715,479
Fair Value Maturity
at Year End (in years)
$ 34,926,335 0.94
4,685,570 0.50
150,040 1.56
581,690 0.25
130,274 2.37
11,993,881 0.22
599,930 0.14
6,698,100 0.11
59,765,820
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State of California Comprehensive Annual Financial Report
b. Credit Risk
Table 3 presents the credit risk of the primary government’s debt securities. If a particular security has
multiple ratings, the lowest rating of the three major NASROs is used. Similar to interest rate risk shown in
Table 2, time deposits and internal loans to state funds are not included.
Table 3
Schedule of Investments in Debt Securities - Primary Government - Credit Risk
June 30, 2014
(amounts in thousands)
Credit Rating as of Year End
Short-term _ _ Long-term _ Fair Vaiue
Pooied investments
A-1+/P-1/F-1+ AAA/Aaa/AAA $ 10,594,908
A-l/P-l/F-1 AA/Aa/AA 13,532,613
Not rated. 130,274
Not applicable. . 35,508,025
Total pooled investments. _$_ 59,765,820
Other primary government investments
A-1+/P-1/F-1+ AAA/Aaa/AAA $ 917,961
A-l/P-l/F-1 AA/Aa/AA 1,782,457
A-2/P-2/F-2 A/A/A 768,419
A-3/P-3/F-3 BBB/Baa/BBB 27,441
Not rated. 444,488
Not applicable. . 774,713
Total other primary government investments. _$_ 4,715,479
c. Custodiai Credit Risk
The State of California has a deposit policy for custodial credit risk that requires deposits held by financial
institutions to be insured by federal depository insurance or secured by collateral. As of June 30, 2014, one
guaranteed investment contract of the Electric Power Fund in the amount of $ 100 million was uninsured and
uncollateralized.
d. Concentration of Credit Risk
The investment policy of the State Treasurer’s Office contains no limitations on the amount that can be
invested in any one issuer beyond those limitations stipulated in the California Government Code. As of
June 30, 2014, the State did not hold debt securities in any one issuer (other than U.S. Treasury securities) that
represented 5% or more of the primary government investments.
90
Notes to the Financial Statements
B. Fiduciary Funds
The fiduciary funds include pension and other employee benefit trust funds of the following fiduciary funds
and component units: California Public Employees’ Retirement System (CalPERS), California State Teachers’
Retirement System (CalSTRS), the fund for the California Scholarshare program, and various other funds.
CalPERS and CalSTRS account for 97% of these separately invested funds. CalPERS and CalSTRS exercise
their authority under the State Constitution and invest in stocks, bonds, mortgages, real estate, and other
investments, including derivative instruments.
Additional disclosure for CalPERS’ investments and derivative instruments is included in CalPERS’
separately issued financial statements, which can be obtained from CalPERS on its website at
www.CalPERS.ca.gov. Additional disclosure for CalSTRS’ investments and derivative instruments is included
in CalSTRS’ separately issued financial statements, which can be obtained from CalSTRS on its website at
WWW. CalSTRS. com.
C. Discretely Presented Component Units
The discretely presented component units consist of the University of California and its foundation, the
California Housing Finance Agency (CalHFA), and various nonmajor component units. The University and
CalHFA constitute 93% of the total investments of discretely presented component units. State law, bond
resolutions, and investment policy resolutions allow component units to invest in U.S. government securities,
state and municipal securities, commercial paper, corporate bonds, investment agreements, real estate, and
other investments. Additionally, a portion of the cash and pooled investments of CalHFA, and other nonmajor
component units are invested in the State Treasurer’s pooled investment program.
Additional disclosures for the University of California’s investments and derivative instruments are included
in the University’s separately issued financial statements, which can be obtained from the University on its
website at www.ucop.edu. Additional disclosure for CalHFA’s investments and derivative instruments is
included in CalHFA’s separately issued financial statements, which can be obtained from CalHFA on its
website at www.CalHFA.ca.gov.
91
State of California Comprehensive Annual Financial Report
NOTE 4: ACCOUNTS RECEIVABLE
Table 4 presents the disaggregation of aecounts reeeivable attributable to taxes, interest expense
reimbursements, Lottery retailer eollections, the California State University, and unemployment program
reeeipts. Other receivables are for interest, gifts, grants, various fees, penalties, and other charges.
Table 4
Schedule of Accounts Receivable
June 30, 2014
(amounts in thousands)
Lottery
Unemployment
Taxes
Retailers
Programs
Current governmental activities
General Fund.
. $
12,482,261
$
—
$
—
Federal Fund.
—
—
—
Transportation Fund.
638,349
—
—
Environmental and Natural Resources Fund.
—
—
—
Nonmajor governmental funds.
435,737
—
—
Internal service funds.
—
—
—
Adjustment:
Unavailable revenue *.
(1,608,039)
—
—
Total current governmental activities.
. $
11,948,308
$
—
$
—
Amounts not scheduled for collection
during the subsequent year (unavailahle revenue).
. $
1,608,039
$
—
$
—
Current husiness-type activities
Water Resources Fund.
. $
—
$
—
$
—
State Lottery Fund.
—
404,239
—
Unemployment Programs Fund.
—
—
1,307,800
California State University.
—
—
—
Nonmajor enterprise programs.
—
—
—
Total current husiness-type activities.
. $
—
$
404,239
$
1,307,800
Amounts not scheduled for collection
during the subsequent year (unavailable revenue).
. $
—
$
—
$
32,109
* The unavailable revenue reported in the governmental fund financial statements represents revenues that are earned
and measurable, but not available within 12 months of the end of the reporting period.
^ Amount includes noncurrent receivables for service concession arrangements of $64 million that were not included in the
governmental fund financial statements.
92
Notes to the Financial Statements
California
State
University
Other
Total
$
— $
683,690
$
13,165,951
—
12,520
12,520
—
490,805
1,129,154
—
523,853
523,853
—
3,021,169
3,456,906
—
109,934
109,934
_
(385,974)
(1,994,013)
$
— $
4,455,997
$
16,404,305
$
— $
450,350
2 $
2,058,389
$
—
$
35,068
$
35,068
—
—
404,239
—
—
1,307,800
191,054
—
191,054
—
32,321
32,321
$
191,054
$
67,389
$
1,970,482
$
253,902
$
$
286,011
93
State of California Comprehensive Annual Financial Report
NOTE 5: RESTRICTED ASSETS
Table 5 presents a summary of the legal restrietions plaeed on assets of the primary government and the
diseretely presented eomponent units.
Table 5
Schedule of Restricted Assets
June 30, 2014
(amounts in thousands)
Cash
and Pooled
Investments
Investments
Due From
Other
Governments
Loans
Receivable
Total
Primary government
Debt service.
.. $ 1,725,392
$ 372,388
$ 20,182
$ 305,278
$
2,423,240
Construction.
3,254,758
—
—
—
3,254,758
Operations.
147,000
—
—
—
147,000
Other.
3,636
—
—
—
3,636
Total primary government.
5,130,786
372,388
20,182
305,278
5,828,634
Discretely presented component units
Debt service.
155,242
30,215
—
—
185,457
Total discretely presented component units ....
155,242
30,215
—
—
185,457
Total restricted assets.
... $ 5,286,028
$ 402,603
$ 20,182
$ 305,278
$
6,014,091
NOTE 6: NET INVESTMENT IN DIRECT FINANCING LEASES
The State Publie Works Board (SPWB) aeeounts for its activities in the Public Buildings Construction Fund,
an internal service fund, and has entered into lease-purchase agreements with various other primary
government agencies and certain local agencies. Payments from these leases will be used to satisfy the
principal and interest requirements of revenue bonds issued by the SPWB. The lease-purchase activity
between the SPWB and the primary government agencies shown in the schedule below represents only that
activity with agencies reported as enterprise funds. The lease receivable of $6.0 billion from governmental
funds along with the corresponding lease obligation was eliminated within the governmental activities column
of the government-wide Statement of Net Position.
California State University System (CSU) accounts for its lease activities in the California State University
Fund, a major enterprise fund, and has entered into capital lease agreements with certain auxiliary
organizations. These agreements lease existing and newly constructed facilities to the auxiliary organizations.
A portion of the proceeds from certain revenue bonds issued by CSU were used to finance the construction of
these facilities.
94
Notes to the Financial Statements
Table 6 summarizes the minimum lease payments to be received by the primary government.
Table 6
Schedule of Minimum Lease Payments to be Received by the Primary Government
(amounts in thousands)
Year Ending Jnne 30
State Public Works Board
Primary
Government Local
Agencies Agencies
Total
California
State
University
2015.
. $ 96,981
$
62,177
$
159,158
$ 29,305
2016.
. 93,299
53,892
147,191
26,639
2017.
. 91,228
39,986
131,214
26,930
2018.
. 78,068
32,698
110,766
27,014
2019.
. 68,417
26,183
94,600
27,039
2020-2024 .
. 263,993
64,282
328,275
144,956
2025-2029 .
. 214,944
63,317
278,261
145,181
2030-2034 .
. 195,607
26,383
221,990
114,458
2035-2039 .
. 34,447
—
34,447
36,895
2040-2044 .
. —
—
—
22,465
2045-2049 .
. .
—
—
4,495
Total minimnm lease payments.
. 1,136,984
368,918
1,505,902
605,377
Less: unearned income.
. 467,486
86,347
553,833
235,020
Net investment in direct ilnancing leases.
Less: current nortion.
. 669,498
. 52.638
282,571
48,191
952,069
100,829
370,357
11,442
Noncurrent net investment in direct ilnancing leases .. $ 616,860
$
234,380
$
851,240
$ 358,915
95
State of California Comprehensive Annual Financial Report
NOTE 7: CAPITAL ASSETS
Table 7 summarizes the eapital aetivity for the primary government.
Table 7
Schedule of Changes in Capital Assets - Primary Government
June 30, 2014
(amounts in thousands)
Beginning Ending
Balance Additions Deductions Balance
Governmental activities
Capital assets not being depreciated/amortized
Land.
State highway infrastructure.
Collections.
Construction in progress.
Intangible assets.
Total capital assets not being depreciated/amortized ,
Capital assets being depreciated/amortized
Buildings and improvements.
Infrastructure.
Equipment and other assets.
Intangible assets.
Total capital assets being depreciated/amortized.
Less accumulated depreciation/amortization for:
Buildings and improvements.
Infrastructure.
Equipment and other assets.
Intangible assets.
Total accumulated depreciation/amortization.
Total capital assets being depreciated/amortized, net
Governmental activities, capital assets, net.
Business-type activities
Capital assets not being depreciated/amortized
Land.
Collections.
Construction in progress.
Intangible assets.
Total capital assets not being depreciated/amortized ,
Capital assets being depreciated/amortized
Buildings and improvements.
Infrastructure.
Equipment and other assets.
Intangible assets.
Total capital assets being depreciated/amortized.
Less accumulated depreciation/amortization for:
Buildings and improvements.
Infrastructure.
Equipment and other assets.
Intangible assets.
Total accumulated depreciation/amortization.
Total capital assets being depreciated/amortized, net
Business-type activities, capital assets, net.
* Restated
$ 17,871,142 *$
498,492 $
111,239
$ 18,258,395
64,183,838 *
1,213,741
128,893
65,268,686
22,645
—
15
22,630
14,053,023 *
3,680,687
2,875,936
14,857,774
1,106,355 *
377,103
17,051
1,466,407
97,237,003
5,770,023
3,133,134
99,873,892
20,448,490 *
1,626,299
16,820
22,057,969
738,492
532
3,312
735,712
4,654,507 *
372,011
266,336
4,760,182
992,911 *
104,748
6,689
1,090,970
26,834,400
2,103,590
293,157
28,644,833
6,841,635 *
538,495
10,287
7,369,843
325,336
19,510
2,244
342,602
3,903,250 *
307,322
247,150
3,963,422
396,561 *
83,013
5,431
474,143
11,466,782
948,340
265,112
12,150,010
15,367,618
1,155,250
28,045
16,494,823
$ 112,604,621 $
6,925,273 $
3,161,179
$ 116,368,715
$ 216,888 $
5,395 $
145
$ 222,138
6,051
1,680
20
7,711
885,919 *
483,767
605,621
764,065
403,979
16,596
171,974
248,601
1,512,837
507,438
777,760
1,242,515
10,451,931
838,891
465,750
10,825,072
236,149
28,554
2,706
261,997
576,331
88,915
14,117
651,129
174,195 *
163,074
1,218
336,051
11,438,606
1,119,434
483,791
12,074,249
4,164,763
256,776
440,014
3,981,525
61,446
12,145
1,937
71,654
347,815
53,901
11,194
390,522
119,035
19,234
621
137,648
4,693,059
342,056
453,766
4,581,349
6,745,547
777,378
30,025
7,492,900
$ 8,258,384 $
1,284,816 $
807,785
$ 8,735,415
96
Notes to the Financial Statements
Table 8 summarizes the depreeiation expense eharged to the aetivities of the primary government.
Table 8
Schedule of Depreciation Expense - Primary Government
June 30, 2014
(amounts in thousands)
Amount
Governmental activities
General government. $ 130,960
Education. 173,453
Health and human services. 74,771
Resources. 51,767
State and consumer services. 66,722
Business and transportation. 182,251
Correctional programs. 220,513
Internal service funds (charged to the activities that utilize the fund). 47,903
Total governmental activities. 948,340
Business-type activities. 342,056
Total primary government. _$_ 1,290,396
Table 9 summarizes the capital activity for discretely presented component units.
Table 9
Schedule of Changes in Capital Assets - Discretely Presented Component Units
June 30, 2014
(amounts in thousands)
Beginning
Ending
Balance
Additions
Deductions
Balance
Capital assets not being depreciated/amortized
Land.
.. $ 986,996
* $
28,058
$ 12,533
$ 1,002,521
Collections.
362,373
28,441
136
390,678
Construction in progress.
2,991,757
*
803,485
133,720
3,661,522
Intangible assets.
5,131
_
49
5,082
Total capital assets not being depreciated/amortized ....
4,346,257
859,984
146,438
5,059,803
Capital assets being depreciated/amortized
Buildings and improvements.
31,251,445
*
1,578,315
46,088
32,783,672
Infrastructure.
666,799
18,349
62
685,086
Equipment and other depreciable assets.
9,822,467
*
566,709
358,044
10,031,132
Intangible assets.
674,542
210,312
48,883
835,971
Total capital assets being depreciated/amortized.
42,415,253
2,373,685
453,077
44,335,861
Less accumulated depreciation/amortization for:
Buildings and improvements.
11,724,481
*
1,153,760
17,902
12,860,339
Infrastructure.
305,908
23,211
22
329,097
Equipment and other depreciable assets.
6,807,869
*
612,565
358,877
7,061,557
Intangible assets.
299,981
24,876
33,094
291,763
Total accumulated depreciation/amortization.
19,138,239
1,814,412
409,895
20,542,756
Total capital assets being depreciated/amortized, net....
23,277,014
559,273
43,182
23,793,105
Capital assets, net.
.. $ 27,623,271
$
1,419,257
$ 189,620
$ 28,852,908
Restated
97
State of California Comprehensive Annual Financial Report
NOTE 8: ACCOUNTS PAYABLE
Accounts payable are amounts, related to different programs, that are due taxpayers, vendors, customers,
beneficiaries, and employees. Table 10 presents details related to accounts payable.
The adjustment for the fiduciary funds represents amounts due fiduciary funds that were reclassified as
external payables on the government-wide Statement of Net Position.
Table 10
Schedule of Accounts Payable
June 30, 2014
(amounts in thousands)
Health
and
Human
Education
Services
Resources
Governmental activities
General Fund.
. $
196,859
$
547,660
$
205,604
Federal Fund.
31,065
331,696
61,154
Transportation Fund.
—
4
3,961
Environmental and Natural Resources Fund.
500
1,101
349,490
Nonmajor governmental funds.
26,285
301,260
20,287
Internal service funds.
11
—
19,497
Adjustment:
Fiduciary funds.
5,911,355
14,646,519
—
Total governmental activities .
. $
6,166,075
$
15,828,240
$
659,993
Business-type activities
Electric Power Fund.
. $
—
$
—
$
6,000
Water Resources Fund.
—
—
78,158
State Lottery Fund.
—
—
—
Unemployment Programs Fund.
—
19
—
California State University.
173,638
—
—
Nonmajor enterprise funds.
—
88
—
Adjustment:
Fiduciary funds.
—
—
—
Total business-type activities .
. $
173,638
$
107
$
84,158
98
Notes to the Financial Statements
Business
and
Transportation
General
Government
and
Others
Total
$ 628
$
407,582
$
1,358,333
260,963
123,443
808,321
367,506
49,959
421,430
—
7,645
358,736
6,441
580,509
934,782
—
483,689
503,197
54,684
734,615
21,347,173
$ 690,222
$
2,387,442
$
25,731,972
$
— $
— $
6,000
—
—
78,158
—
52,691
52,691
—
—
19
—
—
173,638
—
2,549
2,637
_
17
17
$
— $
55,257 $
313,160
99
State of California Comprehensive Annual Financial Report
NOTE 9: SHORT-TERM FINANCING
As part of its cash management program, the State regularly issues short-term obligations to meet cash flow
needs. The State issues revenue anticipation notes (RANs) to partially fund timing differences between
revenues and expenditures, because General Fund revenues and disbursements do not occur evenly
throughout the fiscal year. If additional external cash flow borrowing is required, the State issues revenue
anticipation warrants.
There were no outstanding RANs at the beginning of the fiscal year. To fund cash flow needs for fiscal year
2013-14, the State issued $5.5 billion in RANs on August 15, 2013. The RANs were repaid during May and
June of 2014.
NOTE 10: LONG-TERM OBLIGATIONS
As of June 30, 2014, the primary government had long-term obligations totaling $168.8 billion. Of that
amount, $7.7 billion is due within one year. For governmental activities, the beginning balance of revenue
bonds increased $11.8 billion and the beginning balance of capital lease obligations decreased $5.1 billion as
a result of the reclassification of the Public Buildings Construction Fund from an enterprise fund
(business-type activity) to an internal service fund (governmental activity). This reclassification resulted in the
elimination of the capital lease obligation of the governmental funds to the Public Buildings Construction
Fund in the government-wide Statement of Net Position. After these beginning balance restatements, the
largest changes in long-term obligations for governmental activities are an increase of $3.1 billion in net other
postemployment benefits obligation and an increase of $ 1.1 billion in state-mandated cost claims payable.
Another notable increase occurred in general obligation bonds payable. Notable decreases occurred in revenue
bonds payable and compensated absences payable.
Not included in the mandated cost claims payable shown in Table 11 are certain state-mandated programs that
are in the adjudication process. Until the Commission on State Mandates rules on a test claim, and the claim’s
parameters and guidelines are established, expected costs cannot be reasonably determined; however, a
positive finding for any of the claimants could individually or in aggregate pose a significant cost to the State.
As of June 30, 2014, the pollution remediation obligations increased by $73 million to $1.1 billion. Under
federal Superfund law, responsibility for pollution remediation is placed upon current and previous owners or
operators of polluted sites. Currently, the State’s most significant superfund site is the Stringfellow Class 1
Hazardous Waste Disposal Facility (Stringfellow) located in Riverside County. As of June 30, 2014, the State
estimates that remediation costs at Stringfellow will total $385 million. At two other sites. Leviathan Mine
and BKK Landfill, obligating events have occurred that will probably result in significant liability to the State,
but reasonable estimates of the remediation costs cannot be made at this time. Currently, litigation is in
process to determine the final terms of the settlement for Leviathan Mine. The State’s activities at the site
relate to water pollution remediation. BKK is a closed Class 1 landfill site at which the State is conducting
post-closure care. In addition to superfimd sites, the State’s other pollution remediation efforts include
underground storage tank removal and cleanup, cleanup of polluted groundwater, and contaminated soil
removal and cleanup, as required by state law.
100
Notes to the Financial Statements
The other long-term obligations for governmental aetivities eonsist of $43 million owed for lawsuits, the
University of California unfunded pension liability of $24 million, and the Technology Services Revolving
Fund notes payable of $36 million. The compensated absences will be liquidated by the General Fund, special
revenue funds, capital projects funds, and internal service funds. Workers’ compensation and capital leases
will be liquidated by the General Fund, special revenue funds, and internal service funds. The General Fund
will liquidate net pension obligations, the Proposition 98 funding guarantee, lawsuits, reimbursement of costs
incurred by local agencies and school districts for costs mandated by the State, and the University of
California pension liability.
The largest changes in business-type long-term obligations are a decrease of $952 million for loans payable to
the U.S. Department of Labor to cover shortfalls in the Unemployment Programs Fund and a decrease of
$812 million in revenue bonds payable (after the previously discussed restatement of the beginning balance
for the reclassification of the Public Buildings Construction Fund from an enterprise fund to an internal
service fund).
101
State of California Comprehensive Annual Financial Report
Table 11 summarizes the ehanges in long-term obligations during the year ended June 30, 2014.
Table 11
Schedule of Changes in Long-term Obligations
(amounts in thousands)
Governmental activities
Compensated absences payable.
Workers’ compensation benefits payable.
Certificates of participation and commercial paper outstanding.
Discounts.
Total certificates of participation and commercial paper payable
Capital lease obligations.
General obligation bonds outstanding.
Premiums.
Total general obligation bonds payable.
Revenue bonds outstanding.
Accreted interest.
Premiums.
Discounts.
Total revenue bonds payable.
Mandated cost claims payable.
Net other postemployment benefits obligation.
Net pension obligation.
Other long-term obligations:
Proposition 98 funding guarantee.
Pollution remediation obligations.
Other.
Total other long-term obligations.
Total governmental activities.
Business-type activities
Loans payable.
Lottery prizes and annuities.
Compensated absences payable.
Workers’ compensation benefits payable.
Certificates of participation and commercial paper outstanding.
Capital lease obligations.
General obligation bonds outstanding.
Discounts.
Total general obligation bonds payable.
Revenue bonds outstanding.
Premiums.
Discounts.
Total revenue bonds payable.
Net other postemployment benefits obligation.
Other long-term obligations.
Total business-type activities.
* Restated
Balance
July 1, 2013
Additions
$
4,135,101
$
1,290,940
3,507,477
639,244
538,715
1,254,265
(122)
—
538,593
1,254,265
236,305
*
80,022
79,688,445
5,905,370
2,657,766
505,026
82,346,211
6,410,396
18,590,437
*
2,293,720
383,862
40,564
519,230
184,986
(2,003)
—
19,491,526
2,519,270
6,750,849
1,154,062
15,559,232
4,871,902
3,278,774
207,749
1,914,064
17,523
1,009,216
151,527
140,198
22,132
3,063,478
191,182
$
138,907,546
$
18,619,032
$
8,585,318
$
1,198,904
3,624,432
314,133
98,069
2,078
460
77,560
262,036
1,145,637
177,398
888,280
—
(1,227)
—
887,053
—
13,080,438
*
470,300
721,576
60,851
(358)
—
13,801,656
531,151
510,229
187,723
482,571
37,540
$
27,005,139
$
4,918,809
102
Notes to the Financial Statements
Balance
Due Within
Noncurrent
Deductions
June 30, 2014
One Year
Liabilities
$
1,670,152
$ 3,755,889
$
5,346
$
3,750,543
445,289
3,701,432
410,534
3,290,898
1,194,810
598,170
8,565
589,605
(46)
(76)
(46)
(30)
1,194,764
598,094
8,519
589,575
56,239
260,088
59,896
200,192
5,297,945
80,295,870
3,827,670
76,468,200
182,315
2,980,477
161,390
2,819,087
5,480,260
83,276,347
3,989,060
79,287,287
2,945,896
17,938,261
580,591
17,357,670
—
424,426
—
424,426
147,748
556,468
66,666
489,802
(291)
(1,712)
(292)
(1,420)
3,093,353
18,917,443
646,965
18,270,478
54,259
7,850,652
135,473
7,715,179
1,814,275
18,616,859
—
18,616,859
248,738
3,237,785
—
3,237,785
2,505
1,929,082
409,614
1,519,468
78,777
1,081,966
81,055
1,000,911
59,431
102,899
60,645
42,254
140,713
3,113,947
551,314
2,562,633
$
14,198,042
$ 143,328,536
$
5,807,107
$
137,521,429
$
951,927
$ 7,633,391
$
$
7,633,391
3,588,896
1,234,440
551,260
683,180
90,856
321,346
138,487
182,859
—
2,538
—
2,538
134,949
204,647
153,541
51,106
72,761
1,250,274
70,042
1,180,232
212,800
675,480
56,875
618,605
61
(1,288)
—
(1,288)
212,861
674,192
56,875
617,317
1,216,405
12,334,333
842,670
11,491,663
124,717
657,710
77,339
580,371
1,769
(2,127)
—
(2,127)
1,342,891
12,989,916
920,009
12,069,907
69,530
628,422
—
628,422
21,918
498,193
40,685
457,508
$
6,486,589
$ 25,437,359
$
1,930,899
$
23,506,460
103
State of California Comprehensive Annual Financial Report
NOTE 11: CERTIFICATES OF PARTICIPATION
Table 12 shows debt serviee requirements for eertifieates of partieipation, whieh are financed by lease
payments from governmental activities. The certificates of participation were used to finance the acquisition
and construction of a state office building.
Table 12
Schedule of Debt Service Requirements for Certificates of Participation - Primary Government
(amounts in thousands)
Year Ending June 30
Principal _ _ Interest _ _ Total
2015 . $ 8,565 $ 1,075 $ 9,640
2016 . . 11,915 _625_ 12,540
Total. $_ 20,480 $_ 1,700 $_ 22,180
NOTE 12: COMMERCIAL PAPER AND OTHER LONG-TERM BORROWINGS
The primary government has two commercial paper borrowing programs: a general obligation commercial
paper program and an enterprise fund commercial paper program for the Department of Water Resources.
Under the general obligation and enterprise fund programs, commercial paper (new issuance or rollover
notes) may be issued at the prevailing market rate, not to exceed 11%, for periods not to exceed 270 days
from the date of issuance. The proceeds from the initial issuance of commercial paper are restricted primarily
for construction costs of general obligation bond program projects and certain state water projects. For both
commercial paper borrowing programs, the commercial paper is retired by the issuance of long-term debt, so
commercial paper is considered a noncurrent liability.
To provide liquidity for the programs, the State has entered into revolving credit agreements with commercial
banks. The “Letter of Credit” agreements for the general obligation commercial paper program authorize the
issuance of notes in an aggregate principal amount not to exceed $1.7 billion. As of June 30, 2014, the general
obligation commercial paper program had $578 million in outstanding commercial paper notes for
governmental activities. The current agreement for the enterprise fund commercial paper program authorizes
the issuance of notes in an aggregate principal amount not to exceed $140 million. As of June 30, 2014, the
enterprise fund commercial paper program had $36 million in outstanding notes.
The primary government has a revenue bond anticipation note (BAN) program that consists of borrowing for
capital improvements on certain California State University campuses. As of June 30, 2014, $169 million in
outstanding BANs existed in anticipation of the primary government issuing revenue bonds to the public.
The University of California, a discretely presented component unit, has established a $2 billion commercial
paper program with tax-exempt and taxable components. At June 30, 2014, outstanding taxable commercial
paper totaled $994 million. The University has other borrowings consisting of contractual obligations
resulting from the acquisition of land or buildings and the construction and renovation of certain facilities.
Outstanding borrowings under these uncollateralized financing agreements total $262 million for general
corporate purposes for the period ending June 30, 2014. For more information regarding the commercial
paper program and other long-term borrowings of the University, refer to its separately issued financial report
for fiscal year 2013-14 on its website at www.ucop.edu.
104
Notes to the Financial Statements
NOTE 13: LEASES
The aggregate amount of lease commitments for facilities and equipment of the primary government in effect
as of June 30, 2014, was approximately $3.1 billion. Primary government leases that are classified as
operating leases, in accordance with the applicable standards, contain clauses providing for termination.
Operating lease expenditures are recognized as being incurred over the lease term. Operating lease
expenditures for the year ended June 30, 2014, amounted to approximately $298 million for governmental
activities and $29 million for business-type activities. It is expected that, in the normal course of business,
most of these operating leases will be replaced by similar leases.
The total present value of net minimum capital lease payments for the primary government is $1.5 billion.
Note 10, Long-term Obligations, reports current additions and deductions for these capital lease obligations.
Included in the capital lease commitments are lease-purchase agreements, amounting to a present value of net
minimum lease payments of $1.1 billion that the California State University, reported as an enterprise fund,
has entered into with the State Public Works Board (SPWB), reported as an internal service fund. This amount
represents 74.9% of the total present value of minimum capital lease payments of the primary government.
Also included in the capital lease commitments are lease-purchase agreements to acquire equipment. Total
assets related to capital leases have a net carrying value of $432 million for governmental activities and
$808 million for business-type activities.
The capital lease commitments do not include $6.0 billion in lease-purchase agreements with the SPWB and
$271 million in lease purchase agreements with building authorities that are blended component units. The
SPWB and the building authorities acquire or develop office buildings and then lease the facilities to state
agencies. Upon expiration of the lease, title passes to the primary government. The costs of the buildings and
the related outstanding revenue bonds and certificates of participation are reported as governmental activities
in the government-wide financial statements. Accordingly, the lease receivables and capital lease obligations
associated with these buildings are not included in the government-wide financial statements.
The University of California, a discretely presented component unit, leases land, buildings, and equipment
under agreements recorded as operating leases. Additional disclosure for the University’s lease obligations is
included in its separately issued financial statements that can be obtained from the University on its website at
www.ucop.edu.
105
State of California Comprehensive Annual Financial Report
Table 13 summarizes future minimum lease commitments of the primary government.
Table 13
Schedule of Future Miuimum Lease Commitmeuts - Primary Goverumeut
(amounts in thousands)
Governmental Activities Bnsiness-type Activities
Year Ending June 30
Operating
Leases
Capital
Leases
Operating
Leases
Capital
Leases
Total
2015.
. $ 239,809
$ 65,304
$ 25,216
$
132,459
$
462,788
2016.
. 175,419
51,409
18,949
132,086
377,863
2017.
. 124,533
39,989
17,861
127,679
310,062
2018.
. 60,848
29,047
14,598
127,196
231,689
2019.
. 29,916
26,019
11,107
103,219
170,261
2020-2024 .
. 46,904
53,337
32,165
439,038
571,444
2025-2029 .
. 23,990
4,369
16,373
385,756
430,488
2030-2034 .
. 18,555
4,531
9,941
347,503
380,530
2035-2039 .
. 101
3,833
3,031
149,000
155,965
2040-2044.
. 101
1,519
968
4,775
7,363
2045-2049 .
. 101
—
397
—
498
2050-2054 .
. 101
—
178
—
279
2055-2059 .
. 74
—
32
—
106
2060-2064 .
. 5
—
32
—
37
2065-2069 .
. —
—
32
—
32
2070-2074 .
. —
—
32
—
32
2075-2079 .
. —
—
32
—
32
2080-2084 .
. —
—
32
—
32
2085-2089 .
. —
—
32
—
32
2090-2094 .
. —
—
32
—
32
2095-2099 .
. .
—
33
—
33
Total minimum lease payments .
Less: amount renresentina interest.
. $ 720,457
279,357
19,269
$ 151,073
1,948,711
698,437
$
3,099,598
Present value of net minimum lease payments ..
Less: current portion.
260,088
59,896
1,250,274
70,042
Capital lease obligation, net of current portion .
$ 200,192
$
1,180,232
NOTE 14: COMMITMENTS
As of June 30, 2014, the primary government had commitments of $7.7 billion for certain highway
construction and high-speed rail projects. These commitments are not included as a liability in the Federal
Fund or the Transportation Fund because future expenditures related to these commitments will be reimbursed
with $1.0 billion from local governments and $6.7 billion from proceeds of approved federal grants. The
primary government also had other commitments for which the future expenditures will be reimbursed by the
proceeds of approved federal grants of $569 million for various education programs, $382 million for
terrorism prevention and disaster-preparedness response projects, $286 million for services under the
workforce development program, $160 million for services provided under various public health programs,
$152 million for community service programs, $69 million for services provided under the welfare program,
$30 million for services provided under the rehabilitation program, and $22 million for services provided
under the child support program.
106
Notes to the Financial Statements
The primary government had other commitments, totaling $8.6 billion, that are not included as a liability on
the Balance Sheet or the Statement of Net Position. The $8.6 billion in commitments includes grant
agreements totaling approximately $5.5 billion to reimburse other entities for construction projects for school
building aid, parks, transportation-related infrastructure, housing, and other improvements; and to reimburse
counties and cities for costs associated with various programs. Any assets that have been constructed will not
belong to the primary government, whose payments are contingent upon the other entities entering into
construction contracts. The $8.6 billion in commitments includes $260 million in undisbursed loan
commitments for various programs aimed at providing housing and emergency shelter to persons in need and
$1.0 billion for undisbursed loan commitments to qualified agencies for clean water projects. In addition, the
$8.6 billion in commitments includes $73 million in long-term contracts to purchase power. These contracts
qualify for the Normal Purchase Normal Sale exception under GASB Statement No. 53 and, therefore, are not
included on the Statement of Net Position of the Electric Power Fund nor disclosed as derivative financial
instruments.
The $8.6 billion in commitments also includes contracts of $958 million for the construction of water projects
and the purchase and transmission of power that are not included as a liability on the Statement of Net
Position of the Water Resources Fund. Included in this amount are certain power purchase, sale, and exchange
contracts. The primary government had commitments of $265 million for California State University (CSU)
construction projects. CSU participates in forward-purchase contracts of natural gas and electricity. As of
June 30, 2014, CSU’s obligation under these special purchase arrangements requires it to purchase at fixed
prices an estimated total of $21 million in electricity through December 2015 and $23 million in natural gas
through June 2017. The primary government also had co mm itments of $18 million to veterans for the
purchase of properties under contracts of sale. The California State Fottery Co mm ission had commitments of
$438 million for gaming and telecommunication systems and services. These are long-term projects, and all
of the contracts’ needs may not have been defined. The projects will be funded with existing and future
program resources or with the proceeds of revenue and general obligation bonds.
As of June 30, 2014, the primary government encumbered expenditures of $784 million for the General Fund,
$3.1 billion for the Transportation Fund, $1.1 billion for the Environmental and Natural Resources Fund, and
$658 million for the nonmajor governmental funds. See Note 2A, Budgeting and Budgetary Control, for an
explanation of the primary government’s policy concerning encumbrances.
As of June 30, 2014, the discretely presented and fiduciary component units had other commitments that were
not included as liabilities on the corresponding Statement of Net Position. Additional disclosure for the
University of California’s commitments is included in its separately issued financial statements, which can be
obtained from the University on its website at www.ucop.edu. Additional disclosure for the California
Housing Finance Agency’s (CalHFA) commitments is included in its separately issued financial statements,
which can be obtained from the CalHFA on its website at www.CalHFA.ca.gov. Additional disclosure for the
California Public Employees’ Retirement System’s (CalPERS) commitments is included in its separately
issued financial statements, which can be obtained from CalPERS on its website at www.CalPERS.ca.gov.
107
State of California Comprehensive Annual Financial Report
NOTE 15: GENERAL OBLIGATION BONDS
The State Constitution permits the primary government to issue general obligation bonds for speeifie purposes
and in such amounts as approved by a two-thirds vote of both houses of the Legislature and by a majority of
voters in a general or direct primary election. The debt service for general obligation bonds is appropriated
from the General Fund. Under the State Constitution, the General Fund is used first to support the public
school system and public institutions of higher education; the General Fund can then be used to service the
debt on outstanding general obligation bonds. Enterprise funds and certain other funds reimburse the General
Fund for any debt service it provides on their behalf General obligation bonds that are directly related to, and
are expected to be paid from, the resources of enterprise funds are included as a liability of such funds in the
financial statements. Flowever, the General Fund may be liable for the payment of any principal and interest
on these bonds that is not met from the resources of such funds.
As of June 30, 2014, the State had $80.3 billion in outstanding general obligation bonds related to
governmental activities and $675 million related to business-type activities. In addition, $26.5 billion of
long-term general obligation bonds had been authorized but not issued, of which $25.8 billion is related to
governmental activities and $706 million is related to business-type activities. The total amount authorized
but not issued includes $ 17 billion authorized by the applicable finance committees for issuance in the form of
commercial paper notes. Of this amount, $578 million in general obligation indebtedness in the form of
commercial paper notes was not yet retired by long-term bonds.
A. Variable-rate General Obligation Bonds
The State issues both fixed and variable-rate general obligation bonds. As of June 30, 2014, the State had
$3.0 billion of variable-rate general obligation bonds outstanding, consisting of $814 million in daily rate
bonds with credit enhancement and $1.7 billion in weekly rate bonds with credit enhancement, and
$498 million in weekly or monthly rate bonds without credit enhancement. During fiscal year 2013-14, the
State issued $300 million of variable-rate general obligation bonds without credit enhancement. The interest
rates associated with the credit-enhanced bonds are determined by the remarketing agents to be the lowest rate
that would allow the bonds to sell on the effective date of such rate at a price (without regard to accrued
interest) equal to 100% of the principal amount. The interest rates associated with the unenhanced Index
Floating Rate Bonds are determined by the Securities Industry and Financial Markets Association (SIFMA)
Index rate or percentage of the London Interbank Offered Rate (LIBOR) then in effect plus a pre-determined
spread. The interest on all variable-rate bonds is paid on the first business day of each calendar month.
The credit-enhanced bonds are secured by letters of credit that secure payment of principal and interest on the
bonds. The State has entered into different credit agreements with various banks for each series of
credit-enhanced bonds. Under these credit agreements, the credit providers agree to pay all principal and
interest payments or the commitment amounts to the bondholders; the State is then required to reimburse the
credit providers for the amounts paid. In return, the credit providers are compensated with commitment fees
that are calculated as a percentage of the bank commitment amounts. The bondholders have the right to tender
the bonds daily if the bonds are in a daily rate mode and weekly if the bonds are in a weekly rate mode. Upon
a tender, the remarketing agent will attempt to remarket the bonds to a new investor. If the remarketing of the
bonds is unsuccessful, the bonds will enter into a bank bond period and accrue interest at higher rates, which
cannot exceed 11 % as permitted by law until remarketed or redeemed. If the bonds cannot be remarketed and
remain in a hank bond period ranging from 45 days to 180 days, the bonds will be subject to term loan
payment in 12 equal quarterly installments under the terms stated in the credit agreements. The term loan
period may exceed the expiration dates of the credit agreements. The bonds may be remarketed at any time
during the bank bond or term loan period. There were no bank bonds during fiscal year 2013-14.
108
Notes to the Financial Statements
The letters of credit for the Series 2003 variahle-rate bonds have expiration dates of October 16, 2015;
November 10, 2016; December 16, 2016; and April 12, 2017. The letters of credit for the Series 2004
variable-rate bonds have expiration dates of April 6, 2015; October 15, 2015; and November 10, 2016. The
letters of credit for the Series 2005 variable-rate bonds have expiration dates of November 4, 2016;
November 10, 2016; December 16, 2016; February 17, 2017; and April 11, 2017. The Series 2012A and 2013
C, D and E Index Floating Rate Bonds have mandatory purchase dates on May 1, 2015, December 1, 2016,
December 1, 2017, or December 3, 2018. The Series 2012B SIFMA Index Floating Rate Bonds have final
maturities from 2017 to 2020.
Based on the schedules provided in the Official Statements, any required sinking fund deposits for the
variable-rate general obligation bonds will be set aside in a mandatory sinking fund at the beginning of each
of the following fiscal years: 2015-16 through 2033-34, and 2039-40. The deposits set aside in any fiscal year
may be applied, with approval of the State Treasurer and the appropriate bond finance committees, to the
redemption of any other general obligation bonds then outstanding. To the extent that the deposit is not
applied by January 31 of each fiscal year, the variable-rate general obligation bonds will be redeemed in
whole or in part on an interest payment date in that fiscal year.
B. Economic Recovery Bonds
In 2004, voters approved the one-time issuance of Economic Recovery Bonds. The debt service for these
bonds is payable from and secured by amounts available in the Economic Recovery Bond Sinking Fund, a
debt service fund that consists primarily of revenues from a dedicated sales tax. However, the General Fund
may be liable for the payment of any principal and interest on the bonds that cannot be paid from the
Economic Recovery Bond Sinking Fund.
As of June 30, 2014, the State had $4.6 billion in Economic Recovery Bonds outstanding. Of the $4.6 billion
outstanding, bonds totaling $110 million are variable-rate bonds in the daily-rate mode and $500 million are
mandatory tender bonds. The interest rates associated with the daily-rate bonds are determined by the
remarketing agent to be the lowest rates that would enable them to sell the bonds for delivery on the effective
date of such rate at a price (without regard to accrued interest) equal to 100% of the principal amount. The
interest is paid on the first business day of each calendar month. As described in the Official Statement for the
variable-rate bonds, payment of principal, interest, and purchase price upon tender, is secured by a letter of
credit. The State reimburses the credit provider for any amounts paid. The expiration date for the letter of
credit is December 12, 2014.
C. Mandatory Tender Bonds
Of the $4.6 billion in outstanding Economic Recovery Bonds, $500 million were mandatory tender bonds and
had an interest rate reset date of July 1, 2014. On that date, the bonds became subject to mandatory tender for
purchase at a price equal to 100% of the principal amount, plus accrued interest, without premium. Upon
mandatory tender, the State could have remarketed or redeemed these bonds. The State redeemed these bonds
on July 1, 2014. The debt service requirements in Table 14 include the effect of this redemption in fiscal year
ended June 30, 2015.
As of June 30, 2014, the State had $850 million in outstanding general obligation mandatory tender bonds,
including $450 million with a fixed interest rate and $400 million with an index floating rate (discussed in
Section A). On their respective mandatory tender dates, these bonds are subject to mandatory tender for
purchase at a price equal to 100% of the principal amount, plus accrued interest, without premium, unless the
bonds have been called for redemption on or prior to that day. These bonds have mandatory tender dates on
May 1, 2015; December 1, 2016; December 1, 2017; and December 3, 2018. In the event of an unsuccessful
remarketing of all the outstanding bonds on the scheduled mandatory tender dates, the bonds will enter into a
109
State of California Comprehensive Annual Financial Report
delayed remarketing period and aeerue interest at a higher effeetive interest rate, gradually inereasing on a
stepped basis until they are remarketed, redeemed, or paid at maturity. Current state laws limit interest rates
to 11% per a nn um. With respect to $100 million of the Index Floating Rate Bonds, beginning six months
after the scheduled mandatory tender date, the bonds will be subject to special mandatory redemption in 20
equal quarterly installments until they are remarketed or refunded.
D. Build America Bonds
As of June 30, 2014, the State had $13.5 billion in taxable various-purpose general obligation bonds
outstanding that were issued as “Build America Bonds” under the American Recovery and Reinvestment Act
of 2009 (ARRA) signed into law on February 17, 2009. The bonds will mature between 2020 and 2040.
Pursuant to ARRA, the State receives a cash subsidy payment from the United States Treasury equal to 35%
of the interest payable by the State on the Build America Bonds on or near each interest payment date.
Subsequent federal legislation reduced the Build America Bonds subsidy by 8.7% for the federal fiscal year
ending September 30, 2013 and 7.2% for the federal fiscal year ending September 30, 2014. The cash
payment does not constitute a full faith and credit guarantee of the federal government, but is required to be
paid by the United States Treasury under ARRA. The subsidy payments are deposited into the state treasury.
E. Debt Service Requirements
Table 14 shows the debt service requirements for all general obligation bonds as of June 30, 2014. The
estimated debt service requirements for the $3 billion variable-rate general obligation bonds and the
$ 110 million variable-rate Economic Recovery Bonds are calculated using the actual interest rates in effect on
June 30, 2014. For mandatory tender bonds, the debt service requirements shown in Table 14 are based on the
assumption that the interest rate will remain in effect until the applicable reset dates and that the bonds will be
fully redeemed on their scheduled maturity dates. The amounts do not reflect any interest subsidy under the
Build America Bond program or any other offsets to general fund costs of debt service.
Table 14
Schedule of Debt Service Requirements for General Obligation Bonds
(amounts in thousands)
Governmental Activities _ Business-type Activities
Year Ending June 30
Principal
Interest
Total
Principal
Interest
Total
2015.
,. $ 3,827,670
$ 4,117,916
$ 7,945,586
$
56,875
$
29,345 $
86,220
2016.
3,174,350
3,962,830
7,137,180
75,620
26,610
102,230
2017.
2,759,560
3,829,238
6,588,798
61,895
23,909
85,804
2018.
2,741,100
3,709,530
6,450,630
39,600
21,708
61,308
2019.
3,323,295
3,574,474
6,897,769
26,800
20,220
47,020
2020 - 2024.
14,025,615
15,563,258
29,588,873
75,475
85,212
160,687
2025 - 2029.
12,781,005
12,597,373
25,378,378
55,265
74,625
129,890
2030 - 2034.
14,788,660
9,438,265
24,226,925
157,965
45,129
203,094
2035 - 2039.
15,559,405
5,130,596
20,690,001
91,605
17,834
109,439
2040 - 2044.
7,315,210
942,934
8,258,144
34,380
1,600
35,980
Total .
. $ 80,295,870
$ 62,866,414
$ 143,162,284
$
675,480
$
346,192 $
1,021,672
110
F. General Obligation Bond Defeasances
1. Current Year
Notes to the Financial Statements
On September 10, 2013, the primary government issued $559 million in general obligation bonds to current
refund $586 million of outstanding general obligation bonds maturing in 2015 to 2033. As a result, the
refunded bonds are defeased and the liability for those bonds has been removed from the financial statements.
The refunding decreased overall debt service by $80 million and resulted in an economic gain of $56 million.
The economic gain is the difference between the present value of the old debt service requirements and the
present value of the new debt service requirements, discounted at 4.09% per year over the life of the new
bonds.
On November 5, 2013, the primary government issued $723 million in general obligation bonds to current
refund $782 million of outstanding general obligation bonds maturing in 2015 to 2033. As a result, the
refunded bonds are defeased and the liability for those bonds has been removed from the financial statements.
The refunding decreased overall debt service by $122 million and resulted in an economic gain of
$87 million, discounted at 3.90% per year over the life of the new bonds.
On March 27, 2014, the primary government issued $795 million in general obligation bonds to current and
advance refund $880 million of outstanding general obligation bonds maturing in 2014 to 2034. As a result,
the refunded bonds are defeased and the liability for those bonds has been removed from the financial
statements. The refunding decreased overall debt service by $161 million and resulted in an economic gain of
$117 million, discounted at 3.43% per year over the life of the new bonds.
2. Prior Years
In prior years, the primary government placed the proceeds of the refunding bonds in a special irrevocable
escrow trust account with the State Treasury to provide for all future debt service payments on defeased
bonds. The assets of the trust accounts and the liability for defeased bonds are not included in the State’s
financial statements. As of June 30, 2014, the outstanding balance of general obligation bonds defeased in
prior years was approximately $325 million.
NOTE 16: REVENUE BONDS
A. Governmental Activities
The State Treasurer is authorized by state law to issue Federal Highway Grant Anticipation Revenue Vehicles
(GARVEE bonds). The purpose of these bonds is to accelerate the funding and construction of critical
transportation infrastructure projects in order to provide congestion relief benefits to the public significantly
sooner than with traditional funding mechanisms. These bonds are secured and payable from the annual
federal appropriation for the State’s federal-aid transportation projects. The primary government has no legal
liability for the payment of principal and interest on these revenue bonds. Total principal and interest
remaining on the bonds is $141 million, payable through 2020. In addition, the California Alternative Energy
and Advanced Transportation Financing Authority is authorized to issue Clean Renewable Energy Bonds to
fund the acquisition and installation of certain transportation-related solar energy facilities located throughout
the state. Both of these bonds finance activity in the Transportation Fund and are included in the governmental
activities column of the government-wide Statement of Net Position.
Ill
State of California Comprehensive Annual Financial Report
The Golden State Tobaeeo Seeuritization Corporation (GSTSC), a blended eomponent unit, as authorized by
state law, has issued asset-baeked bonds to purchase 100% of the State’s rights to future revenues from the
Master Settlement Agreement with participating tobacco companies. These bonds are secured by and payable
solely from future Tobacco Settlement Revenue and interest earned on that revenue. The primary government
has no legal liability for the payment of principal and interest on the bonds; provided that, in connection with
the issuance of the 2005 Bonds and the 2013 Bonds that refunded a portion of the 2005 Bonds, the Legislature
has annually granted a General Fund appropriation for payment of debt service in the event tobacco settlement
revenues and other available amounts prove insufficient to make these payments during the next succeeding
fiscal year. Flowever, the use of the appropriated monies has never been required. Total principal and interest
remaining on all asset-backed bonds is $18.4 billion, payable through 2047. All of the Tobacco Settlement
Revenue and interest has been pledged in support of these asset-backed bonds. Principal and interest paid in
the current year totaled $377 million, while Tobacco Settlement Revenue and interest earned totaled
$356 million. These bonds are included in the governmental activities column of the government-wide
Statement of Net Position.
Under state law. State Public Works Board (SPWB), an agency that accounts for its activity in the Public
Buildings Construction Fund, an internal service fund, and certain building authorities may issue revenue
bonds. These bonds are issued for the purpose of constructing state office buildings. Leases with state
agencies pay the principal and interest on the revenue bonds issued by the Public Buildings Construction Fund
and building authorities. The General Fund has no legal liability for the payment of principal and interest on
these revenue bonds. These revenue bonds are included in the governmental activities column of the
government-wide Statement of Net Position.
B. Business-type Activities
Revenue bonds that are directly related to, and are expected to be paid from, the resources of enterprise funds
are included in the accounts of such funds. Principal and interest on revenue bonds are payable from the
pledged revenues of the respective funds of agencies that issued the bonds. The General Fund has no legal
liability for payment of principal and interest on revenue bonds.
Revenue bonds to acquire, construct, or renovate state facilities or to refund outstanding revenue bonds in
advance of maturity are issued for water resources, financing of electric power purchases for resale to utility
customers, state university campuses, and certain nonmajor enterprise funds.
C. Discretely Presented Component Units
The University of California issues revenue bonds to finance various auxiliary, administrative, academic,
medical center, and research facilities. The revenue bonds are not collateralized by any encumbrance,
mortgage, or other pledge of property except pledged revenues, and do not constitute general obligations of
the University. For more information regarding revenue bonds, current year defeasances, and outstanding
defeasances of the University, refer to its separately issued financial report for fiscal year 2013-14 on its
website at www.ucop.edu.
Under state law, the California Flousing Finance Agency (CalFIFA) issues fixed-rate and variable-rate revenue
bonds to fund loans to qualified borrowers for single-family houses and multifamily developments.
Variable-rate debt is typically related to remarketed rates or co mm on indices, such as the Securities Industry
and Financial Markets Association (SIFMA) or the London Interbank Offered Rate (LIBOR) and is reset
periodically. CalHFA issues both federally taxable and tax-exempt bonds. The bonds issued by CalHFA are
payable solely from and collateralized by revenues and other pledged assets. For more information regarding
revenue bonds, current year defeasances, and outstanding defeasances of the CalHFA, refer to its separately
issued financial report for fiscal year 2013-14 on its website at www.CalHFA.ca.gov.
112
Notes to the Financial Statements
Table 15 shows outstanding revenue bonds of the primary government and the diseretely presented
eomponent units.
Table 15
Schedule of Revenue Bonds Payable
June 30, 2014
(amounts in thousands)
Primary government
Governmental activities
Transportation Fund. $ 137,659
Public Buildings Construction Fund. 11,323,687
Nonmajor governmental funds:
Golden State Tobacco Securitization Corporation Fund. 7,167,103
Building authorities. 288,994
Total governmental activities. 18,917,443
Business-type activities
Electric Power Fund. 6,249,000
Water Resources Fund. 2,647,814
California State University. 3,663,116
Nonmajor enterprise funds. 429,986
Total business-type activities. 12,989,916
Total primary government. 31,907,359
Discretely presented component units
University of California. 16,561,052
California Housing Finance Agency. 3,596,347
Nonmajor component units. 246,756
Total discretely presented component units. 20,404,155
Total revenue bonds payable. _$_ 52,311,514
113
State of California Comprehensive Annual Financial Report
Table 16 shows the debt serviee requirements for fixed-rate and variable-rate bonds. It exeludes unamortized
premiums and diseounts that are ineluded in Table 15.
Table 16
Schedule of Debt Service Requirements for Revenue Bonds
(amounts in thousands)
Primary Government _ Discretely Presented
Governmental Activities _ Bnsiness-type Activities _ Component Units
Year Ending June 30
Principal
Interest
Principal
Interest
Principal
Interest *
2015.
. $
580,591
$
894,061
$
842,670
$
581,159
$
388,475
$
909,744
2016.
545,951
870,953
922,715
543,053
452,003
881,647
2017.
610,761
844,555
951,265
501,123
449,336
859,986
2018.
649,146
813,396
985,515
456,399
435,674
838,259
2019.
628,196
776,337
1,015,355
410,747
441,415
817,289
2020-2024 .
3,111,706
3,499,513
3,979,498
1,317,112
2,896,410
3,699,230
2025-2029 .
3,136,099
2,920,227
1,564,505
704,171
3,040,940
2,921,805
2030-2034 .
3,167,515
1,982,982
1,128,675
367,114
3,463,482
2,157,148
2035-2039 .
2,592,035
1,156,841
722,470
137,853
3,342,858
1,357,680
2040-2044.
1,904,530
820,802
217,270
20,047
2,729,054
674,677
2045-2049 .
1,436,157
3,507,027
4,395
98
1,187,130
321,722
2050-2112 .
—
—
—
—
881,225
2,633,368
Total.
. $
18,362,687
$
18,086,694
$
12,334,333
$
5,038,876
$
19,708,002
$
18,072,555
* Includes interest on variable-rate bonds based on rates in effect on June 30, 2014.
D. Revenue Bond Defeasances
1. Current Year - Governmental Activities
In September 2013, the SPWB and the University of California entered into a series of restructuring
agreements, in which bonds held by the SPWB for University projects were refunded by revenue bonds issued
by the University. Additionally, on October 2, 2013, the SPWB entered into an escrow agreement with the
State Treasurer. The cash transferred to the State Treasurer, along with deposits from the University from the
refunding bonds, will be used to make principal and interest payments for the refunded debt, resulting in the
legal defeasance of $2.2 billion in bonds payable. The restructuring was authorized in the 2013-14 budget.
The SPWB and the University also executed termination agreements relating to all leases relating to the
defeased and redeemed bonds. As a result, all the net investment in direct financing leases, construction work
in progress, and bonds payable related to these leases were removed from the Public Buildings Construction
Fund Statement of Net Position. The net effect of these transactions was a loss of $55 million, as shown in the
Public Buildings Construction Fund’s Statement of Revenues, Expenses, and Changes in Fund Net Position.
114
Notes to the Financial Statements
2. Current Year - Business-type Activities
As discussed under governmental activities above, the restructuring agreement between the SPWB and the
University and the escrow agreement between the SPWB and the State Treasurer resulted in the legal
defeasance of all outstanding bonds reported in the High Technology Education Fund, a nonmajor enterprise
fund. In addition, the related lease receivable was terminated and the High Technology Education Fund’s
remaining assets were transferred to the escrow account with the State Treasurer and the fund was dissolved.
The net effect of the restructure and refunding was a loss of $27 million, as shown in the enterprise funds’
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position.
In August 2013, California State University issued $309 million in systemwide revenue refunding bonds to
partially defease certain outstanding systemwide revenue bonds. A portion of the proceeds was deposited into
an escrow account to provide for all future debt service payments on the refunded bonds. As a result, the
bonds are considered defeased and the liability for these bonds has been removed from the financial
statements. This refunding will decrease debt service payments by $22 million over the life of the bonds and
will result in an economic gain of $19 million for the refunded bonds.
3. Prior Years
In prior years, the primary government defeased certain bonds by placing the proceeds of new bonds in
irrevocable trust accounts to provide for all future debt service requirements. Accordingly, the assets and
liabilities for these defeased bonds are not included in the financial statements. As of June 30, 2014, the
outstanding balance of revenue bonds defeased in prior years was $632 million for business-type activities.
All previously defeased revenue bonds for governmental activities were redeemed by June 30, 2014.
NOTE 17: SERVICE CONCESSION ARRANGEMENTS
The State entered into various service concessions arrangements with independent third parties to develop,
equip, operate, and maintain nonexclusive concessions at park grounds in exchange for fixed installment
payments, for a fixed period of time. These third parties are compensated by user fees. These existing
facilities are reported as capital assets by the State, the present value of installment payments are reported as
receivables, and a corresponding deferred inflow of resources is reported in the government-wide Statement
of Net Position. The State reserves the right to provide or modify the types of goods and services provided by
the operator to ensure that the public receives fair pricing, proper service, and appropriate quality. The State is
not obligated by the debts of the operator in the event of a default, nor does the State guarantee minimum
revenue to the operator. The amount of the primary government’s service concession arrangements can be
found in Note 21, Deferred Outflows and Deferred Inflows of Resources.
The University of California, a discretely presented component unit, has entered into service concession
arrangements with third parties for student housing and certain other faculty and student services. Payments
received or to be received by the University from service concession arrangements are reported as deferred
inflows of resources. Additional information on the University’s service concession arrangements can be
found in the University’s separately issued financial statements on its website at www.ucop.edu.
115
State of California Comprehensive Annual Financial Report
NOTE 18: INTERFUND BALANCES AND TRANSFERS
A. Interfund Balances
Short-term interfund reeeivables and payables result from the time lag between the dates on whieh goods and
services are delivered and the dates on which payments between entities are made. In addition, interfund
borrowing, mainly from nonmajor governmental funds and fiduciary funds, is used to meet temporary
imbalances of receipts and disbursements in the General Fund.
Table 17 shows the amounts due from and due to other funds.
Table 17
Schedule of Due From Other Fuuds aud Due To Other Fuuds
June 30, 2014
(amounts in thousands)
Due To
Environmental
and Natural Nonmajor Eleetric
General Transportation Resources Governmental Power
Due From
Fund
Fund
Fund
Fund
Fund
Governmental funds
General Fund.
. $
—
$
—
$
—
$
571,090
$
—
Federal Fund.
632,163
919,991
37,392
248,038
—
Transportation Fund.
19,052
—
—
34,836
—
Environmental and Natural Resources Fund ...
21,278
6,476
—
5
—
Nonmajor governmental funds.
768,555
30,274
7,836
18,272
—
Total governmental funds .
1,441,048
956,741
45,228
872,241
_
Enterprise funds
Water Resources Fund.
—
—
—
—
—
State Lottery Fund.
137
155
—
314,620
—
Unemployment Programs Fund.
59,896
—
—
—
—
Nonmajor enterprise funds.
1,107
—
151
208
—
Total enterprise funds .
61,140
155
151
314,828
—
Internal service funds .
8,707
13,779
2,861
19,126
3,000
Total due from other funds .
. $
1,510,895
$
970,675
$
48,240
$
1,206,195
$
3,000
116
Notes to the Financial Statements
Due To
California
Water
State
Unemployment
State
Nonmajor
Internal
Total
Resources
Lottery
Programs
University
Enterprise
Service
Fiduciary
Due to
Fund
Fund
Fund
Fund
Funds
Funds
Funds
Other Funds
$ —
$
$ —
$ 257
$ —
$
285,469
$ 8,416,873
$
9,273,689
—
—
36,689
—
169
10,870
10,952,460
12,837,772
—
—
—
—
—
12,660
54,090
120,638
—
—
—
—
21
19,349
109
47,238
—
—
—
382
75
17,424
1,923,001
2,765,819
—
—
36,689
639
265
345,772
21,346,533
25,045,156
47,681
47,681
—
—
—
—
—
—
—
314,912
_
_
_
_
_
69
17
1,552
—
—
—
—
—
47,750
17
424,041
1,129
295
1,827
466
407
48,400
640
100,637
$ 1,129
$
295
$ 38,516
$ 1,105
$ 672
$
441,922
$ 21,347,190
$
25,569,834
117
State of California Comprehensive Annual Financial Report
Interfund receivables and payables are the result of interfund loans that are not expected to be repaid within
one year. In addition to the temporary interfimd cash-flow borrowing shown in Table 17, annual enacted
budgets provide for long-term loans from many of the State’s special funds—mainly the Transportation Fund,
Environmental and Natural Resources Fund, and nonmajor governmental funds—to the General Fund. The
$3.3 billion in Transportation Fund loans payable from the General Fund also includes $1.0 billion in deferred
Proposition 42 transfers for traffic congestion relief and other direct loans from the Traffic Congestion Relief
Program.
Table 18 shows the primary government’s interfund receivables and payables.
Table 18
Schedule of Interfund Receivables and Payables
June 30, 2014
(amounts in thousands)
Interfund Payables
Environmental
and Natural
Interfund Receivables
General
Fund
Transportation
Fund
Resources
Funds
Governmental funds
General Fund.
Transportation Fund.
Environmental and Natural Resources Fund.
Nonmajor governmental funds.
. $
8,584
$ 3,337,281
25,000
$
829,227
Total governmental funds.
8,584
40,650
3,362,281
829,227
Internal service funds.
Total primary government.
. $
49,234
$ 3,362,281
$
829,227
118
Notes to the Financial Statements
Interfund Payables
Nonmajor
Governmental
Fund
Water
Resources
Fund
Unemployment
Programs
Fund
Nonmajor
Enterprise
Funds
Internal
Service
Funds
Total
$ 1,332,548
$
$
611,690
$
5,600
$
7,191 $
6,123,537
—
—
—
—
2,316
2,316
—
—
—
—
—
25,000
—
—
—
—
—
8,584
1,332,548
—
611,690
5,600
9,507
6,159,437
172
91,517
—
—
6,267
138,606
$ 1,332,720
$
91,517
$
611,690
$
5,600
$
15,774 $
6,298,043
119
State of California Comprehensive Annual Financial Report
The amounts shown as due from primary government and due to eomponent units represent short-term
reeeivables and payables between the primary government and component units resulting from the time lag
between the dates on which goods and services are provided and received and the dates on which payments
between entities are made.
Table 19 shows the amounts due from the primary government and due to component units.
Table 19
Schedule of Due from Primary Goverumeut aud Due to Compoueut Uuits
June 30, 2014
(amounts in thousands)
Due To
Component Units
Due From
University
of
California
Nonmajor
Component
Units
Total
Governmental funds
General Fund.
Total governmental funds..
. $ 205,129
. 205,129
$
1,212
1,212
$
206,341
206,341
Total primary government.
. $ 205,129
$
1,212
$
206,341
120
Notes to the Financial Statements
This page intentionally left blank
121
State of California Comprehensive Annual Financial Report
B. Interfund Transfers
Transfers move money colleeted by one fund to another fund, which then disburses it as required by law. The
General Fund and certain other funds transfer money to support various programs accounted for in other
funds. The largest transfer from the General Fund was $2.3 billion to the California State University, an
enterprise fund. The General Fund also transferred $1.6 billion to nonmajor governmental funds mainly for
support of trial courts and state and local government health care programs. The Transportation Fund
transferred $1.0 billion of weight fee revenues to the Transportation Debt Service Fund, a nonmajor
governmental fund, for reimbursement of debt service costs. The Federal Fund transferred $631 million to the
General Fund for administration of the Unemployment Insurance Program.
Table 20 shows interfimd transfers of the primary government.
Table 20
Schedule of Interfund Transfers
June 30, 2014
(amounts in thousands)
Transferred To
Transferred From
General
Fund
Transportation
Fund
Environmental
and Natural
Resources
Funds
Governmental funds
General Fund .
. $
—
$
—
$ 28,853
Federal Fund .
631,194
—
173,568
Transportation Fund .
74,430
—
12,903
Environmental and Natural Resources Fund .
8,849
—
—
Nonmajor governmental funds .
273,021
25
24,775
Total governmental funds.
987,494
25
240,099
Nonmajor enterprise funds.
199
—
—
Internal service funds.
8,766
—
—
Total primary government.
. $
996,459
$
25
$ 240,099
122
Notes to the Financial Statements
Transferred To
Nonmajor
Governmental
Funds
California
State
University
Fund
Internal
Service
Funds
Total
$ 1,577,442
$
2,302,858
$
6,394
$
3,915,547
17,970
—
—
822,732
1,071,822
—
—
1,159,155
13,814
—
—
22,663
86,129
—
—
383,950
2,767,177
2,302,858
6,394
6,304,047
—
—
6,649
6,848
37,490
—
63,614
109,870
$ 2,804,667
$
2,302,858
$
76,657
$
6,420,765
123
State of California Comprehensive Annual Financial Report
NOTE 19: FUND BALANCES, FUND DEFICITS, AND ENDOWMENTS
A. Fund Balances
Table 21 shows the eomposition of the governmental fund balanees at June 30, 2014.
Table 21
Schedule of Fund Balances by Function
June 30, 2014
(amounts in thousands)
General
Federal
Transportation
Environmental
and Natural
Resources
Nonmajor
Governmental
Year Ending June 30
Fund
Fund
Fund
Fund
Funds
Nonspendable
Long-term interfund receivables.
. $
49,234
$
—
$
—
$
—
$
—
Long-term loans receivable.
79,375
—
—
—
—
Other.
—
—
—
—
27,260
Total nonspendable .
128,609
_
_
_
27,260
Restricted
General government.
6,113
—
—
14,222
3,639,099
Education.
284,204
296
4,824
—
852,134
Health and human services.
101,301
257
—
1,365,893
2,295,229
Resources.
—
9,217
—
4,838,324
98,547
State and consumer services.
2,628
—
224,207
55,432
518,981
Business and transportation.
—
201,804
7,169,827
47,236
2,931,637
Correctional programs.
—
—
—
—
1,927
Total restricted .
394,246
211,574
7,398,858
6,321,107
10,337,554
Committed
General government.
13,999
—
—
21,623
334,549
Education.
3,023
—
—
—
30,777
Health and human services.
4,445
—
1,430
—
269,511
Resources.
455
—
10
1,275,839
740,043
State and consumer services.
—
—
—
23,649
57,697
Business and transportation.
—
—
65,926
—
87,123
Correctional programs.
103,198
—
—
—
6,570
Total committed .
125,120
_
67,366
1,321,111
1,526,270
Assigned - General government .
—
—
—
—
18,857
Unassigned .
(8,092,571)
_
_
(11,664)
(8,481)
Total fund balances (deficit) .
. $
(7,444,596)
$
211,574
$
7,466,224
$
7,630,554
$
11,901,460
124
Notes to the Financial Statements
B. Fund Deficits
Table 22 shows the funds that had deficit balances at June 30, 2014.
Table 22
Schedule of Fund Deficits
June 30, 2014
(amounts in thousands)
Governmental Internal Service Enterprise
Funds
Funds
Funds
General Fund.
Architecture Revolving Fund.
Service Revolving Fund.
Water Resources Fund.
Unemployment Programs Fund.
. $ 7,444,596 $
— $
26,660
172,160
51,390
2,657,890
Total fund deficits.
. $ 7,444,596 $
250,210 $
2,657,890
C. Discreteiy Presented Component Unit Endowments and Gifts
The University of California, a discretely presented component unit, administers certain restricted
nonexpendable, restricted expendable, and unrestricted endowments that are included in the related net
position categories of the government-wide and fund financial statements. As of June 30, 2014, the total value
of restricted endowments and gifts was $14.2 billion and unrestricted endowments and gifts was $2.1 billion.
The University’s policy is to retain realized and unrealized appreciation on investments with the endowment
after an annual income distribution. The net appreciation available to meet future spending needs upon
approval by the Board of Regents amounted to $2.1 billion at June 30, 2014. The portion of investment
returns earned on endowments and distributed each year to support current operations is based on a rate
approved by the Board of Regents. In addition, the California State University Auxiliary Organizations and
the University of California Hastings College of the Law, nonmajor component units, have restricted
nonexpendable and restricted expendable endowments of $946 million and $9 million, respectively.
NOTE 20: RISK MANAGEMENT
The primary government has elected, with a few exceptions, to be self-insured against loss or liability. The
primary government generally does not maintain reserves. Losses are covered by appropriations from each
fund responsible for payment in the year in which the payment occurs. The State is permissively self-insured
and barring any extraordinary catastrophic event, the potential amount of loss faced by the State is not
considered material in relation to the primary government’s financial position. Generally, the exceptions are
when a bond resolution or a contract requires the primary government to purchase commercial insurance for
coverage against property loss or liability. There have been no significant reductions in insurance coverage
from the prior year. In addition, no insurance settlement in the last three years has exceeded insurance
coverage. All claim payments are on a “pay-as-you-go” basis, with workers’ compensation benefits for
self-insured agencies initially being paid by the State Compensation Insurance Fund.
125
State of California Comprehensive Annual Financial Report
The discounted liability for unpaid self-insurance claims of the primary government is estimated to be
$3.7 billion as of June 30, 2014. This estimate is based primarily on actuarial reviews of the State’s workers’
compensation program and includes indemnity payments to claimants, as well as all other costs of providing
workers’ compensation benefits, such as medical care and rehabilitation. The estimate also includes the
liability for unpaid services fees, industrial disability leave benefits, and incurred-but-not-reported amounts.
The estimated total liability of approximately $5.2 billion is discounted to $3.7 billion using a 3.5% interest
rate. Of the total, $410 million is a current liability, of which $273 million is included in the General Fund,
$134 million in the special revenue funds, and $3 million in the internal service funds. The remaining
$3.3 billion is reported as other noncurrent liabilities in the government-wide Statement of Net Position.
The University of California, a discretely presented component unit, is self-insured or insured through a
wholly-owned captive insurance company for medical malpractice, workers’ compensation, employee health
care, and general liability claims. These risks are subject to various claim and aggregate limits, with excess
liability coverage provided by an independent insurer. Liabilities are recorded when it is probable that a loss
has occurred and the amount of the loss can be reasonably estimated. These losses include an estimate for
claims that have been incurred but not reported. The estimated liabilities are based on an independent actuarial
determination of the anticipated future payments, discounted at rates ranging from 2% to 5%.
Table 23 shows the changes in the self-insurance claims liability for the primary government and the
discretely presented component units.
Table 23
Schedule of Changes in Self-Insurance Claims
Year Ended June 30
(amounts in thousands)
Unpaid claims, beginning
Incurred claims.
Claim payments.
Unpaid claims, ending...
Discretely Presented
Primary
Government
Component Unit
University of California
2014
2013
2014
2013
$ 3,509,555
$
3,204,635 $
631,798
$
599,176
639,704
754,641
467,191
421,832
(445,289)
(449,721)
(454,411)
(389,210)
$ 3,703,970
$
3,509,555 $
644,578
$
631,798
126
Notes to the Financial Statements
NOTE 21: DEFERRED OUTFLOWS AND DEFERRED INFLOWS OF RESOURCES
In the fund financial statements, governmental funds reported deferred inflows of resources of $2.0 billion
because this amount represents revenues that are earned and measurable, but not available within 12 months
of the end of the reporting period.
Table 24 shows the detail of the deferred outflows of resources and deferred inflows of resources reported in
the government-wide Statement of Net Position.
Table 24
Schedule of Deferred Outflows aud Deferred luflows of Resources
June 30, 2014
(amounts in thousands)
_Primary Government_
Governmental Business-Type Component
Activities Activities Total Units
Deferred outflows of resources:
Loss on refunding of debt.
Decrease in fair value of hedging derivatives
Net pension liability.
Total deferred outflows of resources.
$ 986,477 $ 242,167 $ 1,228,644
986,477 _ 242,167 _ 1,228,644
$ 346,480
100,282
3,290,476
3,737,238
Deferred inflows of resources:
Gain on refunding of debt.
Service concession arrangements.
Net pension liability.
Other deferred inflows.
Total deferred inflows of resources
106,426
—
106,426
1,561
64,376
—
64,376
30,701
—
—
—
7,077,861
—
822,886
822,886
—
$
170,802 $
822,886 $
993,688 $
7,110,123
NOTE 22: NO COMMITMENT DEBT
Certain debt of the nonmajor component units is issued to finance activities such as the promotion of
renewable energy sources and financing for economic development projects. This debt is secured by the credit
of private and public entities and is administered by trustees independent of the State. As of June 30, 2014,
these component units had approximately $4.3 billion of debt outstanding, which is not debt of the State.
The conduit obligations outstanding for the California Housing Finance Agency, a major component unit,
amounted to $341 million, which is not debt of the State.
NOTE 23: CONTINGENT LIABILITIES
A. Litigation
The primary government is a party to numerous legal proceedings, many of which are not unusual for
governmental operations. To the extent they existed, the following were accrued as a liability in the
government-wide financial statements: legal proceedings that were decided against the primary government
127
State of California Comprehensive Annual Financial Report
before June 30, 2014; legal proceedings that were in progress as of June 30, 2014, and were settled or decided
against the primary government as of March 19, 2015; and legal proceedings having a high probability of
resulting in a decision against the primary government as of March 19, 2015, and for which amounts could be
estimated. In the governmental fund financial statements, the portion of the liability that is expected to be paid
within the next 12 months is recorded as a liability of the fund from which payment will be made. In the
proprietary fund financial statements, the entire liability is recorded in the fund from which payment will be
made.
In addition, the primary government is involved in certain other legal proceedings that, if decided against the
primary government, may impair its revenue sources or require it to make significant expenditures. Because
of the prospective nature of these proceedings, no provision for the potential liability has been made in the
financial statements.
Following are the more significant lawsuits pending against the primary government.
The primary government is a defendant in two cases, Bakersfield Mall, LLC v. Franchise Tax Board, and
CA-Centerside II, LLC v. Franchise Tax Board, both regarding the constitutionality of a fee imposed on
limited-liability companies (LLC). Plaintiffs allege class action relief, declaratory relief, and seek attorney
fees based on alleged violations to the state and federal constitutions. They seek certification of two classes of
allegedly similarly situated LLCs and unspecified amount of refunds on behalf of the LLC classes, alleged to
be in excess of 50,000 members. Briefing of the appeal was completed on December 17, 2014, and the parties
are waiting for notice of oral argument.
In a previously settled case. Northwest Energetic Services, LLC v. Franchise Tax Board, the Court of Appeal
found the fee unconstitutional only as applied to the plaintiff. The primary government has already begun to
pay refunds to LLCs with the same facts as Northwest that have no income earned inside California. In
another recently settled case, Ventas Finance I, LLC v. Franchise Tax Board, the Court of Appeal also ruled
that the fee is unconstitutional as applied to the plaintiff, but it awarded only a partial refund because Ventas
received income from both inside and outside of California. Bakersfield Mall, LLC v. Franchise Tax Board
raised the same constitutional issues as Northwest and Ventas, but initially pertained to LLCs that conduct
business solely within California. Bakersfield Mall, LLC later amended its complaint to reflect the fact that
not all of its income is derived within the state, making it similar to the Ventas case. This plaintiff also
intended to bring a class action suit for refund on behalf of all similarly situated LLCs and to declare the LLC
fee unconstitutional. However, the Court of Appeal ruled that Bakersfield Mall, LLC did not follow
mandatory class action claim procedures. CA-Centerside II, LLC v. Franchise Tax Board raised the same
constitutional issues as the Bakersfield case, and alleges that the LLC fee is unconstitutional regarding any
activities, whether in-state or out-of-state. Actual and expected future claims for refunds from LLCs are
estimated to be as high as $1.2 billion.
The primary government is a defendant in a case, Harley-Davidson, Inc. and Subsidiaries v. Franchise Tax
Board regarding the constitutionality of Revenue and Taxation Code section 25101.15 allowing intrastate
unitary businesses the option of reporting the income of various entities within the unitary business on either a
separate or combined basis. The plaintiff claims, among other things, that section 25101.15 unlawfully
discriminates against them because it allows intrastate unitary businesses the option to report on either a
separate or combined basis, and that they should be allowed to report the income of their business entities on a
separate basis. The Franchise Tax Board prevailed in the trial court, and the case is fully briefed and awaiting
oral argument on appeal. If section 25101.15 were invalidated, the dollar amount of potential refunds for past
years is impossible to estimate, but could be substantial. The potential loss of future revenue is also
impossible to estimate, but could be mitigated by legislative action.
128
Notes to the Financial Statements
The primary government is a defendant in another case, Abercrombie & Fitch Co. & Subsidiaries v. Franchise
Tax Board, regarding constitutionality of Revenue and Taxation Code section 25101.15. The parties’
cross-motions for summary judgment were heard on January 8, 2015. After that hearing, the superior court
stayed further proceedings pending an appellate decision in the Harley-Davidson case. An estimate of
potential loss is not possible.
The primary government is the defendant in a consolidated case. The Gillette Company & Subsidiaries v.
Franchise Tax Board, formerly six cases, Kimberly-Clark Worldwide, Inc. et al. v. Franchise Tax Board',
Gillette Company v. Franchise Tax Board', Proctor & Gamble v. Franchise Tax Board', Sigma-Aldrich, Inc. v.
Franchise Tax Board', RB Holdings (USA), Inc. v. Franchise Tax Board', and Jones Apparel Group Inc. v.
Franchise Tax Board, regarding the application of California’s double-weighted sales factor apportionment
formula under Revenue and Taxation Code section 25128. Multistate taxpayers claim that amended Revenue
and Taxation Code section 25128 is invalid because California failed to repeal the entire Multistate Tax
Compact. The case is fully briefed and before the California Supreme Court awaiting a hearing date.
Taxpayers seek a combined refund totaling approximately $34 million (plus statutory interest) for taxable
years 1993 through 2005. If amended section 25128 is found invalid, the potential total refunds to other
taxpayers are impossible to estimate with precision, but could exceed $750 million.
The primary government is the defendant in the following cases: Anthem Blue Cross v. David Maxwell-Jolly,
et al.', Molina Family Health Plan v. DHCS', Health Net of California, Inc. v. DHCS', and Santa Clara Family
Health Plan v. David Maxwell-Jolly et al. regarding application of budget reduction factors to managed-care
capitated rates. These cases have been settled on a contingent basis based on the plans’ profitability. The
estimated combined potential total loss is more than $400 million based on four separate settlement
agreements that were entered into in 2013 and 2014.
B. Federal Audit Exceptions
The primary government receives substantial funding from the federal government in the form of grants and
other federal assistance. The primary government, the University of California, California Housing Finance
Agency (CalHFA), and certain nonmajor discretely presented component units are entitled to these resources
only if they comply with the terms and conditions of the grants and contracts and with the applicable federal
laws and regulations; they may spend these resources only for eligible purposes. If audits disclose exceptions,
the primary government, the University, CalHFA, and certain nonmajor discretely presented component units
may incur a liability to the federal government.
129
State of California Comprehensive Annual Financial Report
NOTE 24: PENSION TRUSTS
Two retirement systems, the California Publie Employees’ Retirement System (CalPERS) and the California
State Teaehers’ Retirement System (CalSTRS), whieh are fidueiary eomponent units, are ineluded in the
pension and other employee benefit trust funds eolumn of the fidueiary funds and similar eomponent units’
finaneial statements.
Both CalPERS and CalSTRS retirement systems implemented the GASB Statement No. 67, Financial
Reporting for Pension Plans—an amendment of GASB Statement No. 25, in their fiseal year 2013-14 finaneial
statements. The objeetive of GASB 67 is to improve finaneial reporting by state and loeal governmental
pension plans and the deeision-usefuhiess of reported pension information as well as to inerease the
transpareney, eonsisteney, and eomparability of pension information aeross governments.
The California Eegislature passed and the Governor signed the “Publie Employees’ Pension Reform Aet of
2013” (PEPRA) on September 12, 2012. PEPRA eontained a number of provisions intended to reduee future
pension obligations. PEPRA primarily affeets new pension plan members who are enrolled for the first time
after Deeember 31, 2012. The finaneial impaet will be gradually realized as total pension eosts and the
employer share of those eosts deerease.
CalPERS administers four defined benefit retirement plans: the Publie Employees’ Retirement Fund, the
Judges’ Retirement Fund, the Judges’ Retirement Fund II, and the Eegislators’ Retirement Fund. CalPERS
also administers three defined eontribution plans: the State Peaee Offieers’ and Firefighters’ Defined
Contribution Plan Fund, the Publie Ageney Deferred Compensation Plan, and the publie employee
Supplemental Contributions Program Fund. The predominanee of both assets and liabilities reside in the
Publie Employees’ Retirement Fund. CalPERS issues a publiely available finaneial report that ineludes
finaneial statements and required supplementary information for these plans. This report may be obtained
from the California Publie Employees’ Retirement System on its website at www.CalPERS.ea.gov.
CalPERS uses the aeerual basis of aeeounting. Contributions to the pension trust funds are reeognized in the
period in whieh the eontributions are due pursuant to legal requirements. Benefits and refunds in the defined
benefit plans are reeognized when due and payable in aecordanee with the terms of eaeh plan.
CalSTRS administers four defined benefit retirement plans within the State Teaehers’ Retirement Plan: the
Defined Benefit Program, the Defined Benefit Supplement Program, the Cash Balanee Benefit Program, and
the Replaeement Benefit Program. CalSTRS issues a publiely available finaneial report that ineludes finaneial
statements and required supplementary information for these plans. This report may be obtained from the
California State Teaehers’ Retirement System on its website at www.CalSTRS.eom.
CalSTRS uses the aeerual basis of aeeounting. Member eontributions are reeognized in the period in whieh
the eontributions are earned. Employer and primary government eontributions are reeognized when earned
and when the employer or the primary government has made a formal eommitment to provide the
eontributions. Benefits and refunds are reeognized when due and payable, in aecordanee with the retirement
and benefits programs.
A. Public Employees’ Retirement Fund
1. Fund Information
Plan Description: CalPERS administers the Public Employees’ Retirement Fund (PERF). The PERF is
comprised of and reported as three separate entities for accounting purposes. PERF A is comprised of agent
multiple-employer plans, which includes State of California and most public agencies’ rate plans with more
130
Notes to the Financial Statements
than 100 active members. PERF B is a cost-sharing multiple-employer plan of school employers consisting of
non-teaching and non-certified employees. PERF C is a cost-sharing multiple-employer plan of public
agencies plans with generally less than 100 active members. Employers participating in the PERF include the
primary government and certain discretely presented component units, 1,517 school employers, and 1,746
public agencies as of June 30, 2014.
The amount by which the actuarial accrued liability exceeded the actuarial value of assets in the PERF for the
primary government and other participating agencies was $36.4 billion at June 30, 2013, as a result of the
difference between the actuarial value of assets of $111.0 billion and the actuarial accrued liability of
$147.4 billion. Contributions are either actuarially determined or determined by statute.
2. Employer’s Information
Plan Description: The primary government and certain discretely presented component units contribute to the
PERF. CalPERS acts as a common investment and administrative agent of the primary government and the
other member agencies. The primary government employees served by the PERF include first-tier and
second-tier miscellaneous and industrial employees, California Highway Patrol employees, peace officers and
firefighters, and other safety members. In the June 30, 2013 actuarial valuation, the payroll for primary
government employees covered by the PERF for the 2012-13 fiscal year was $15.3 billion.
All employees in a covered class of employment who work half-time or more are eligible to participate in the
PERF. The PERF provides benefits based on members’ years of service, age, final compensation, and benefit
formula. Vesting occurs after five years or after ten years for second-tier employees. The PERF provides
death, disability, and survivor benefits. The benefit provisions are established by statute.
Funding Policy: Benefits are funded by contributions from members and the primary government and by
earnings from investments. Member and primary government contributions are a percentage of applicable
member compensation. Member rates are defined by law and based on the primary government’s benefit
formulas. The primary government contribution rates are determined by periodic actuarial valuations or by
statute.
Employees, with the exception of employees in the State’s Alternate Retirement Program, contribute to the
fund based on the required contribution rates. The contribution rates of active plan members are based on a
percentage of salary over a monthly base compensation ranging from $0 to $863. Employees’ required
contributions vary from 1.5% to 12.0% of their salaries over the base compensation amount.
All of the primary government employees served by the PERF are now covered by group term life insurance.
131
State of California Comprehensive Annual Financial Report
Table 25 shows the required employer eontribution rates for the primary government.
Table 25
Schedule of Required Employer Coutributiou Rates for the Primary Goverumeut - By Member Category
Year Ended June 30, 2014
Group
Normal Unfunded Term Life Total
Cost Liability Benefit Rate
Miscellaneous members
First tier. 8.089 % 12.961 % 0.071 % 21.121 %
Second tier. 7.960 12.961 0.071 20.992
Industrial (first and second tier). 10.325 5.357 0.000 15.682
California Highway Patrol. 12.895 21.683 0.038 34.616
Peace officers and firefighters. 15.489 15.006 0.000 30.495
Other safety members. 12.007 5.198 0.000 17.205
For the year ended June 30, 2014, the annual pension cost (APC) and the amount of contributions made by the
primary government were each $3.7 billion. The APC and the percentage of APC contributed for the last three
years are shown in Table 27. Actuarial valuations of the PERF are performed annually. Information from the
last valuation, which was performed as of June 30, 2013, is also shown in Table 27.
The Schedule of Funding Progress, presented as required supplementary information (RSI) following the
notes to the financial statements, presents multiyear trend information about whether the actuarial value of
plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits.
B. Teachers’ Retirement Fund
Plan Description: CalSTRS administers the Teachers’ Retirement Fund, which is an employee benefit trust
fund created to finance the State Teachers’ Retirement Plan (STRP). The STRP is a defined benefit pension
plan that provides for retirement, disability, and survivor benefits. Four programs comprise the STRP: the
Defined Benefit (DB) Program, the Defined Benefit Supplement (DBS) Program, the Cash Balance (CB)
Benefit Program, and the Replacement Benefit (RB) Program. The STRP is a cost-sharing, multiple-employer,
defined-benefit retirement plan that provides pension benefits to teachers and certain other employees of the
California public school system.
Membership in the DB Program is mandatory for all employees meeting the eligibility requirements. The DB
Program provides benefits based on a member’s age, final compensation, and years of service. Vesting occurs
after five years. In addition, the retirement program provides benefits to members upon disability and to
survivors upon the death of eligible members. The Teachers’ Retirement Law establishes the benefits for the
DB Program. The DB Program had 1,687 contributing employers at June 30, 2014 and, as of June 30, 2013,
had 416,643 active and 182,576 inactive program members and 269,274 benefit recipients. The primary
government is a nonemployer contributor to the DB Program. The payroll for employees covered by the DB
Program for the year ended June 30, 2014, was approximately $27.1 billion.
Membership in the DBS Program is automatic for all members of the DB Program. The DBS Program
provides benefits based on the amount of funds contributed. Vesting in the DBS Program occurs automatically
with vesting in the DB Program. The Teachers’ Retirement Law establishes the benefits for the DBS Program.
The primary government does not contribute to the DBS Program.
132
Notes to the Financial Statements
The CB Benefit Program is designed for employees of California publie sehools who are hired to perform
ereditable serviee for less than 50% of the full-time equivalent for the position. Employer partieipation in the
CB Benefit Program is optional. However, if the employer eleets to offer the CB Benefit Program, eaeh
eligible employee will automatieally be covered by the CB Benefit Program unless the member elects to
participate in the DB Program or an alternative plan provided by the employer within 60 days of hire or the
election period determined by the employer. At June 30, 2014, the CB Benefit Program had 32 contributing
school districts and 35,066 contributing participants.
The RB Program is a qualified excess benefits arrangement for DB Program members that is administered
through a separate pension trust apart from the other three STRP programs and was established in accordance
with Internal Revenue Code Section 415(m). Internal Revenue Code Section 415(b) imposes a dollar limit on
the annual retirement benefits an individual may receive from a qualified defined benefit pension plan. The
program is funded as needed. Monthly contributions that would otherwise be credited to the DB program are
instead credited to the RB Program to fund monthly program costs. Monthly employer contributions are
received and paid to members in amounts equal to the benefits not paid as a result of Internal Revenue Code
Section 415(b), subject to withholding for any applicable income or employment taxes. At June 30, 2014, the
RB Program had 260 participants.
Funding Policy. DB Program benefits are funded by contributions from members, employers, the primary
government, and earnings from investments. Members and employers contribute a percentage of applicable
member earnings. The Teachers’ Retirement Law governs member rates, employer contribution rates, and
primary government contributions.
The DB Program contribution rate for members under the CalSTRS 2% at 60 formula is 8.00% of creditable
compensation, while the contribution rate for members under the CalSTRS 2% at 62 formula is 50% of the
normal cost of their retirement plan, which resulted in an 8.00% contribution rate of creditable compensation
for the fiscal year 2013-14. The employer contribution rate is 8.25% of creditable compensation. In fiscal year
2013-14, the General Fund contribution was 2.017% of total creditable compensation of the fiscal year ending
in the prior calendar year. Education Code section 22955(b) states that the General Fund will contribute
additional quarterly payments at a contribution rate of 0.524% of creditable earnings of the fiscal year ending
in the immediately preceding calendar year when there is an unfunded actuarial obligation or a normal cost
deficit. The percentage is adjusted up to 0.25% per year to reflect the contributions required to fund the
unfunded actuarial obligation or the normal cost deficit. However, the transfer may not exceed 1.505% of
creditable compensation from the immediately preceding calendar year. The normal cost deficit is the
difference between the normal cost rate and the member and employer contributions. Based on the actuarial
valuation, as of June 30, 2012, there is no normal cost deficit, but there was an unfunded obligation for
benefits in place as of July 1, 1990. Therefore, the General Fund was required to contribute the additional
quarterly payments at a contribution rate of 1.024% starting October 1, 2013. As of June 30, 2014, the state
contributed $201 million of the $268 million total amount for fiscal year 2013-14.
Assembly Bill 1469 (AB 1469) was passed by the Legislature on June 15, 2014, signed into law on
June 24, 2014, and took effect immediately. This bill was designed to address the long-term funding gap of
the DB Program. It creates a plan to fiilly fund the DB Program by 2046 through increases in employer. State,
and employee contributions. The portion of the state appropriation under Education Code section 22955(b)
that is in addition to the 2.017% has been replaced by section 22955.1(b) in order to fully fund by 2046 the
benefits in effect as of 1990.
As a result of AB 1469, the fourth quarterly payment of $67 million was included in an increased first-quarter
payment of $94 million for fiscal year 2014-15, which was transferred on July 1, 2014.
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State of California Comprehensive Annual Financial Report
Table 26 shows the CalSTRS’ state eontribution rates effeetive for fiseal year 2014-15 and beyond.
Table 26
Schedule of CalSTRS’ State Contribution Rates
Effective Date
Base Rate
July 1,2014
2.017 %
July 1,2015
2.017
July 1,2016
2.017
July 1,2017 to June 30, 2046
2.017
July 1, 2046 and thereafter
2.017
AB 1469
Increase for
1990 Benefit
Strnctnre
sbma'
Fnnding
Total State
Appropriation
to DB Program
1.437 %
2.50 %
5.954 %
2.874
2.50
7.391
4.311
2.50
8.828
4.311
2.50
8.828
2
2.50
4.517 ^
* Supplemental Benefits Maintenance Account
2 AB 1469 gives the CalSTRS board limited authority to adjust state contribution rates from July 1, 2017, through June 30, 2046 in order to
eliminate the remaining unfunded actuarial obligation associated with the 1990 benefit structure. The board cannot increase the rate by more than
0.50 percent in a fiscal year, and if there is no unfunded actuarial obligation, the contribution rate imposed to pay for the 1990 benefit structure
shall be reduced to 0 percent. Rates in effect prior to July 1, 2014, are reinstated, if necessary, to address any remaining 1990 unfunded actuarial
obligation from July 1, 2046, and thereafter.
The DBS Program member contribution rate for service that exceeds one full year during a fiscal year is 8.0%
and the employer rate is 8.0%.
For the year ended June 30, 2014, the employer and primary government contributions were approximately
$2.3 billion and $1.4 billion, respectively. Actuarial valuations of the DB Program are performed annually.
Information from the last valuation is shown in Table 27.
134
Notes to the Financial Statements
Table 27
Actuarial Information - Pension Trusts - Public Employees’
Retirement Fund and
State Teachers’ Retirement Defined Benefit Program Fund
Valuation Date as Indicated
State Teachers’
Public
Retirement
Employees’
Defined
Retirement
Benefit Program
Fund
Fund *
Last actuarial valuation.
June 30, 2013
June 30,2013
Actuarial cost method.
Individual Entry
Entry Age
Age Normal
Normal
Amortization method.
Level % of Payroll
Level % of Payroll,
Open
Remaining amortization period.
30 years
30 years
Asset valuation method.
Smoothed
Expected Value,
Market Value
With 33%
Adjustment to
Market Value
Actuarial assumption
Investment rate of return.
7.50 %
7.50 %
Projected salary increase.
3.20- 18.60
3.75
Includes inflation at.
2.75
3.00
Post-retirement benefit increases.
2.00 - 3.00
2.00
Annual pension costs (in millions)
Year ended 6/30/11.
. $
3,277
$ 5,985
Year ended 6/30/12.
2,928
6,230
Year ended 6/30/13.
3,236
6,629
Year ended 6/30/14.
3,749
2
Percent contribution
Year ended 6/30/11.
100 %
47 %
Year ended 6/30/12.
100
46
Year ended 6/30/13.
100
44
Year ended 6/30/14.
100
2
Funding as of last valuation (in millions)
Actuarial value - assets.
. $
110,989
$ 148,614
Actuarial accrued liabilities (AAL) - entry age.
147,392
221,861
Unfunded actuarial accrued liability (UAAL).
36,403
73,247
Covered payroll.
15,346
27,117
Funded ratio.
75.3 %
67.0 %
UAAL as percent of covered payroll.
237.2 %
270.1 %
1 The State is a nonemployer contributor to the State Teachers’ Retirement Defined Benefit Program Fund, a cost-sharing multiple-employer plan. The
annual pension cost includes the amount related to both the State and the local government employers. According to the provisions of the Teacher’s
Retirement Law and the related Education Codes, the State and local government employers contributed $1.4 billion and $2.3 billion, respectively, for
the year ending June 30, 2014. Based on the most recent actuarial valuation, dated June 30, 2013, current statutory contributions are sufficient to fund
normal costs but are not expected to be sufficient to amortize the unfunded actuarial obligation. However, future estimates of the actuarial unfunded
obligation may change due to market performance, legislative actions, and other experience that may differ from the actuarial assumptions.
2 CalSTRS implementation of GASB 67 in its 2013-14 fiscal year financial statements makes information related to the annual pension cost and the
related percent contribution rates incomparable for financial presentation to prior years displayed.
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State of California Comprehensive Annual Financial Report
NOTE 25: POSTEMPLOYMENT HEALTH CARE BENEFITS
State of California Other Postemployment Benefits Plan Description: The primary government provides
health benefits (medical and prescription drug benefits) and dental benefits to annuitants of retirement systems
through a substantive single-employer defined benefit plan to which the primary government contributes as an
employer (State substantive plan). The primary government also offers life insurance, long-term care, and
vision benefits to retirees; however, because these benefits are completely paid for by the retirees, the primary
government has no liability. The design of health and dental benefit plans can be amended by the California
Public Employees’ Retirement System (CalPERS) Board of Administration and the California Department of
Human Resources (CalHR), respectively. Employer and retiree contributions are governed by the primary
government and can be amended by the primary government through the Eegislature. The State contributes to
the California Employers’ Retiree Benefit Trust Fund (CERBTF). The CERBTF is a self-funded trust fund for
the prefunding of health, dental, and other non-pension benefits. CalPERS reports on the CERBTF as part of
its separately issued annual financial statements, which can be obtained from CalPERS on its website at
WWW. CalPERS .ca.gov.
Fifty-eight county superior courts (trial courts) are included in the primary government. However, each trial
court is a separate employer for GASB Statement No. 45 reporting purposes. Fifty trial courts have a
single-employer defined benefit plan; these plans have separate biennial actuarial valuations. One trial court
(San Diego) has a cost-sharing multiple-employer defined benefit plan. Seven trial courts (Alameda, Del
Norte, Fresno, Mendocino, Modoc, San Benito, and Stanislaus) have no plan. Twenty-one plans are not
accounted for in a trust fund and do not issue separate reports.
To be eligible for these benefits, primary government first-tier plan annuitants must retire on or after age 50
with at least five years of service, and second-tier plan annuitants must retire on or after attaining age 55 with
at least 10 years of service. In addition, annuitants must retire within 120 days of separation from employment
to be eligible to receive these benefits. During the 2013-14 fiscal year, approximately 168,200 annuitants were
enrolled to receive health benefits and approximately 139,000 annuitants were enrolled to receive dental
benefits. As of July 1, 2013, the most recent actuarial valuation date, the trial courts had approximately 4,200
enrolled retirees and spouses.
Funding Policy: The contribution requirements of plan members and the State are established and may be
amended by the Eegislature. In accordance with the California Government Code, the State generally pays
100% of the health insurance cost for annuitants, plus 90% of the additional premium required for the
enrollment of family members of annuitants. The State generally pays all or a portion of the dental insurance
cost for annuitants, depending upon the completed years of credited state service at retirement and the dental
coverage selected by the annuitant, as specified in the California Government Code. The State funds the cost
of providing health and dental insurance to annuitants primarily on a pay-as-you-go basis, with a modest
amount of prefunding for members of Bargaining Units 5, 12, and 16. The maximum 2014 monthly State
contribution was $642 for one-party coverage, $1,218 for two-party coverage, and $1,559 for family
coverage.
Each of the trial courts determines its respective retirees’ benefits and benefit levels as well as the funding
policy for its respective plan. Twenty-one trial courts fund retirees’ benefits on a strictly pay-as-you-go basis.
The 2013 monthly contribution rate for the trial courts with single-employer defined benefit plans, the latest
year for which contribution information is available, ranged from $8 to $1,134,429, with the average being
$119,867. One trial court (Yolo) continuously contributes at least the annual required contribution (ARC) of
the employer, an amount actuarially determined in accordance with the parameters of GASB Statement
No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal
costs each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed
30 years. Sonoma and Marin are on a pay-as-you-go plus 50% of direct-subsidy benefits funding policy (after
136
Notes to the Financial Statements
initial contribution) until their plans are fully funded. Orange contributed the larger of the ARC. or 3.5% of
payroll, with at least the ARC contributed for 2014, with no commitment to future contributions. San Diego, a
cost-sharing multiple-employer defined benefit plan, had a contribution rate of 1.94% of annual covered
pension payroll. Seventeen other trial courts made contributions only in 2014, with five other trial courts
contributing in other years (Placer in 2013 and 2014; San Mateo in 2013, 2014, and 2015; Nevada in 2012
and 2013; Santa Cruz in 2013; and Butte in 2014 and prior years, which fully funded the plan), but none of
these 22 trial courts are committing to future trust contributions. Lassen is fully funded with no future
contributions expected. Imperial has committed to $20,000 per year for future contributions, and Santa Clara
funding policy is set by the County and will increase to 70% of the ARC long term. For the year ended
June 30, 2014, the State contributed $1.9 billion toward annuitants’ health and dental benefits. Of this amount,
the trial courts represent $73 million and certain discretely presented component units represent $4 million.
Annual Other Postemployment Benefits (OPEB) Cost and Net OPEB Obligation: The State’s annual OPEB
cost (expense) is calculated based on the ARC. Table 28 presents the State’s OPEB cost, the percentage of
annual OPEB cost contributed to the plan, and the net OPEB obligation for the year ended June 30, 2014, and
the two preceding years, including trial courts.
Table 28
Schedule of Annual OPEB Cost, Percentage of Annual OPEB Cost Contributed
and Net OPEB Obligation
(amounts in thousands)
Percentage of
Annual OPEB Cost
Fiscal Year Ended
Annual OPEB Cost
Contributed
Net OPEB Obligation
June 30, 2012
$ 4,837,769
36.20 %
$ 13,440,768
June 30, 2013
4,992,924
35.33
16,267,964
June 30, 2014
5,129,284
37.20
19,489,030
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State of California Comprehensive Annual Financial Report
Table 29 presents the eomponents of the State’s net OPEB obligation to the OPEB plan, including trial courts.
Table 29
Schedule of Net OPEB Obligations
June 30, 2014
(amounts in thousands)
Amount
Annual required contribution. $ 5,046,539
Interest on net OPEB obligations. 736,019
Adjustment to annual required contribution. . (653,274)
Annual OPEB cost. 5,129,284
Contributions made. (1,908,218)
Increase in net OPEB obligation. 3,221,066
Net OPEB obligations - beginning of year. . 16,267,964
Net OPEB obligations - end of year. _$_ 19,489,030
Funded Status and Funding Progress: As of June 30, 2014—the most recent actuarial valuation date for the
State substantive plan—the actuarial accrued liability (AAE) for benefits was $71.8 billion, and the actuarial
value of assets was $41 million, resulting in an unfunded actuarial accrued liability (UAAE) of $71.8 billion.
The covered payroll (annual payroll of active employees covered by the plan) was $19.3 billion, and the ratio
of the UAAE to the covered payroll was 373%.
For the trial courts, as of July 1, 2013—the most recent actuarial valuation date—the AAE for benefits was
$1.4 billion and the actuarial value of assets was $30 million, resulting in an UAAE of $1.4 billion. The
covered payroll was $931 million and the ratio of the UAAE to covered payroll was 149%.
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions
about the probability of occurrence of events far into the future. Examples include assumptions about
mortality and the healthcare cost trend. Amounts determined regarding the plan’s funded status and the
employer’s armual required contributions are subject to continual revision as actual results are compared with
past expectations and new estimates are made about the future. The schedule of funding progress, presented as
required supplementary information following the notes to the financial statements, presents multiyear trend
information about whether the actuarial value of plan assets is increasing or decreasing over time relative to
the actuarial accrued liabilities for benefits.
Actuarial Methods and Assumptions: Projections of benefits for financial reporting purposes are based on the
substantive plan (the plan as understood by the employer and the plan members) and include the types of
benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between
the employer and plan members to that point. The actuarial methods and assumptions used are consistent with
a long-term perspective.
In the June 30, 2014 State substantive plan actuarial valuation, the individual entry age normal cost method
was used. The actuarial assumptions included a 4.25% investment rate of return and an annual health care cost
trend rate of actual increases for 2015 and 8.00% in 2016 initially, reduced to an ultimate rate of 4.50% in
2021. Both rates included a 2.75% armual inflation assumption. Armual wage inflation is assumed to be
3.00%. The UAAE is being amortized as a level percentage of active member payroll on an open basis over
30 years.
138
Notes to the Financial Statements
In the July 1, 2013 biennial actuarial valuations, the entry age normal cost method was used for 50 of the trial
courts. The actuarial assumptions included a 3.75% investment rate of return for 40 trial courts. There are 10
other trial courts with investment rates of return ranging from 4.75% to 7.50%. The actuarial assumptions
included an annual health care cost trend rate of 8.25% for most trial courts initially, reduced incrementally to
an ultimate trend rate of 5.00% after five years. Annual inflation and payroll growth are assumed to be 2.75%
and 3.00%, respectively, for most trial courts. The UAAL is amortized on an open basis over 30 years as a
level percentage of payroll for 46 trial courts. Three other trial courts (Lassen, Orange, and Yolo) amortize on
a closed basis as a level percentage of payroll over 29, 24, and 25 years, respectively. Alpine is amortizing
using the level dollar amount over 24 years on a closed basis.
NOTE 26: SUBSEQUENT EVENTS
The following information describes significant events that occurred subsequent to June 30, 2014, but prior to
the date of the auditor’s report.
A. Debt Issuances
Between September 2014 and March 2015, the primary government issued $5.5 billion in general obligation
bonds to finance or refinance capital facilities or other voter-approved costs for public purposes, including
children’s hospitals; housing; prisons; libraries; earthquake safety and public building rehabilitation;
transportation; highway safety, traffic reduction, air quality, and port security; public primary, secondary,
community college and university education facilities; passenger rail; safe and clean drinking water; clean
water; water security, clean air, parks, coastal and beach protection; seismic retrofit; high-speed rail; stem cell
research; and veterans’ homes.
In September 2014, the primary government issued $110 million in veterans general obligation bonds to
finance or refinance obligations that were issued to provide funds for financing of contracts for the purchase
of homes and farms for military veterans who reside in California.
In August 2014, the California State University issued $748 million in revenue bonds to refund certain
maturities of Systemwide Revenue Bonds series 2004A, 2005A, and 2005C; repay bond anticipation notes,
refund other outstanding bond indebtedness by an auxiliary organization; and fund new capital projects.
In October 2014, the State Public Works Board issued $250 million in lease revenue bonds to finance and
refinance the cost of design and/or construction of various projects for the benefit of the Department of
Corrections and Rehabilitation, Department of State Hospitals, and Judicial Council of California.
In October 2014 and November 2014, the Department of Water Resources issued a combined total of
$795 million in water system revenue bonds to retire or redeem certain outstanding bonds and commercial
paper notes, to fund deposits to the debt service reserve account, to fund capitalized interest, and to pay
related issuance costs.
B. Cash Management
In September 2014, the State issued $2.8 billion of Revenue Anticipation Notes to fund, in part, the State’s
cash management needs of the 2014-15 fiscal year by supporting the cash flow needs of the General Fund.
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State of California Comprehensive Annual Financial Report
C. other
In August 2014, the Electric Power Fund received $142 million in energy settlements to resolve claims arising
from events and transactions in Western Energy Markets during the period of January 1, 2000, through
June 20, 2001.
In September 2014, CalPERS received a settlement check of $88 million from Citigroup MBS Securities
related to residential mortgage-backed securities.
In October 2014, CalPERS received $249 million from Ba nk of America as part of a settlement related to
mortgage-backed securities.
In the November 4, 2014 general election:
• Voters passed Proposition 1 authorizing the issuance of $7.1 billion of general obligation bonds and
reallocating $425 million of unused bond authority from prior water bond acts for state water supply
infrastructure projects.
• Voters passed Proposition 2 requiring the annual transfer of 1.5% of general fund revenue to the state
budget stabilization account, and personal capital gain tax revenues exceeding 8% of general fund
revenues to the budget stabilization account and, under certain conditions, a dedicated K-14 school
reserve fund. The proposition also requires that half of the budget stabilization account revenues be used
to repay state debts and unfunded liabilities. Proposition 2 allows limited use of the state budget
stabilization account in the event of an emergency or if there is a state budget deficit. Proposition 2 caps
the state budget stabilization account at 10% of general fund revenues, directing the remainder to
infrastructure.
• Voters passed Proposition 47 requiring, absent prior conviction for certain serious offenses,
misdemeanor sentencing for certain drug possession offenses and certain property crimes involving
amounts of $950 or less. Proposition 47 requires the resentencing of persons serving felony sentences
for these offenses unless the court finds unreasonable public safety risk. Any savings are to be applied to
mental health and drug treatment programs, K-12 schools, and crime victims.
In November 2014, Standard and Poor’s Rating Services raised the State’s general obligation rating to “A-t”
from “A”, citing as a motivating factor the November 4, 2014 voter approval of Proposition 2 that strengthens
the budget stabilization account.
In November 2014, the primary government entered into a note purchase agreement with Bank of America
allowing the State to request the bank to purchase up to $500 million of general obligation commercial paper.
In February 2015, Fitch raised the State’s general obligation rating to “A-t” from “A”, citing the State’s
continued improvement in its fundamental fiscal position, institutionalized changes to its fiscal operations,
and ongoing economic and revenue recovery as contributing to an improved financial position and enhancing
the State’s ability to address future fiscal challenges.
California’s demand for unemployment insurance benefits required the State to continue borrowing from the
U.S. Department of Eabor during the 2014-15 fiscal year. As of June 30, 2014, the State had $7.6 billion in
outstanding loans with the U.S. Department of Eabor which were used to cover deficits in the Unemployment
Programs Fund. As of March 19, 2015, the State had an outstanding loan balance of $8.1 billion. While the
State continued to request additional loans during 2015, it estimates that these loans will be fully repaid by
2019.
140
Required
Supplementary
Information
State of California Comprehensive Annual Financial Report
Schedule of Funding Progress
(amounts in millions)
Public Employees’ Retirement Fund - Primary Government
Actuarial
Actuarial
Unfunded
UAAL as a
Actuarial
Value of
Accrued
Actuarial Accrued
Funded
Covered
Percentage of
Valuation
Assets
Liability
Liability (UAAL)
Ratio
Payroll
Covered Payroll
Date
(a)
(b)
(b-a)
(a/b)
(c)
((b-a)/c)
June 30, 2011
$ 102,452
$
129,648
$ 27,196
79.0 %
$ 16,212
167.7 %
June 30, 2012
106,145
134,314
28,169
79.0
15,680
179.6
June 30, 2013
110,989
147,392
36,403
75.3
15,346
237.2
State Teachers’ Retirement
Defined Benefit Program
Actuarial
Actuarial
Unfunded
UAAL as a
Actuarial
Value of
Accrued
Actuarial Accrued
Funded
Covered
Percentage of
Valuation
Assets
Liability
Liability (UAAL)
Ratio
Payroll
Covered Payroll
Date
(a)
(b)
(b-a)
(a/b)
(c)
((b-a)/c)
June 30, 2011
$ 143,930
$
207,770
$ 63,840
69.3 %
$ 26,592
240.1 %
June 30, 2012
144,232
214,765
70,533
67.2
26,404
267.1
June 30, 2013
148,614
221,861
73,247
67.0
27,117
270.1
Other Postemployment Benefit Plan
Actuarial
Actuarial
Unfunded
UAAL as a
Actuarial
Value of
Accrued
Actuarial Accrued
Funded
Covered
Percentage of
Valuation
Assets
Liability
Liability (UAAL)
Ratio
Payroll
Covered Payroll
Date
(a)
(b)
(b-a)
(a/b)
(c)
((b-a)/c)
State substantive plan
June 30, 2012
$ 8
$
63,845
$ 63,837
0.0 %
$ 18,710
341.2 %
June 30, 2013
10
64,585
64,574
0.0
18,060
357.6
June 30, 2014
41
71,814
71,773
0.0
19,250
372.8
Trial Courts *
July 1,2009
$ 9
$
1,493
$ 1,484
0.6 %
$ 1,009
147.0 %
July 1,2011
17
1,385
1,368
1.2
922
148.4
July 1,2013
30
1,421
1,391
2.1
931
149.4
* The trial courts reporting is based on 51 individual biennial actuarial valuations as of July 1, 2013.
Note: The University of California provides OPEB benefits through its Retirement Health Plan to its eligible retirees and their
families. As the University is the employer providing these benefits, the State will not be reporting these benefits in Note 25
or the Required Supplementary Information. Information regarding the University and references to its financial statements
can be found in Note 1, Section A.3., Discretely Presented Component Units.
142
Required Supplementary Information
Infrastructure Assets Using the Modified Approach
Pursuant to Governmental Accounting Standards Board (GASB) Statement No. 34, the State uses the
modified approach to report the cost of its infrastructure assets (state roadways and bridges). Under the
modified approach, the State does not report depreciation expense for roads and bridges but capitalizes all
costs that add to the capacity and efficiency of State-owned roads and bridges. All maintenance and
preservation costs are expensed and not capitalized.
A. Infrastructure Asset Reporting Categories
The infrastructure assets reported in the State’s financial statements for the fiscal year ending June 30, 2014,
are in the following categories and amounts: state highway infrastructure (completed highway projects)
totaling $65.2 billion, land purchased for highway projects totaling $13.5 billion, and infrastructure
construction-in-progress (uncompleted highway projects) totaling $12.5 billion.
Donation and Relinquishment: Donation and relinquishment activity affects the inventory of statewide lane
miles, land, and/or bridges as adjustments to the infrastructure assets and/or land balance in the State’s
financial statements. For the fiscal year ending June 30, 2014, donations are $74,290 of infrastructure land,
and relinquishments are $61 million of state highway infrastructure (completed highway projects) and
$ 13 million of infrastructure land.
B. Condition Baseiines and Assessments
1. Bridges
The State uses the Bridge Health Index (BHl)—a numerical rating scale from 0 to 100 that uses element-level
inspection data—to determine the aggregate condition of its bridges. The inspection data is based on the
American Association of State Highway and Transportation Officials’ “Guide to Commonly Recognized
Structural Elements.”
143
State of California Comprehensive Annual Financial Report
From a deterioration standpoint, the BHI represents the remaining asset value of the bridge. A new bridge that
has 100% of its asset value has a BHI of 100. As a bridge deteriorates over time, it loses asset value, as
represented by a decline in its BHI. When a deteriorated bridge is repaired, it will regain some (or all) of its
asset value and its BHI will increase.
The following table shows the State’s established condition baseline and actual BHI for fiscal years 2011-12
through 2013-14:
Fiscal Year
Ended June 30
Established BHI Baseline'
Actual BHI
2012
80.0
94.5
2013
80.0
94.8
2014
80.0
95.6
1
The actual statewide BHI should not be lower than the minimum BHI established by the State.
The following table provides details on the State’s actual BHI as of June 30, 2014:
BHI Description Bridge Count Percent Network BHI
Excellent
7,211
54.96 %
99.9
Good
4,635
35.33
96.9
Acceptable
680
5.18
86.3
Fair
132
1.01
74.2
Poor
102
0.78
62.8
Does not carry traffic
360
2.74
93.2
Total
13,120
100.00 %
2. Roadways
The State conducts a periodic pavement condition survey, which evaluates ride quality and structural integrity
and identifies the number of distressed lane miles. The State classifies its roadways’ pavement condition by
the following descriptions:
1. Excellent/good condition - minor or no potholes or cracks
2. Fair condition - moderate potholes or cracks
3. Poor condition - significant or extensive potholes or cracks
Statewide lane miles are considered “distressed lane miles” if they are in either fair or poor condition. The
actual distressed lane miles are compared to the established condition baseline to ensure that the baseline is
not exceeded.
144
Required Supplementary Information
The following table shows the State’s established condition baseline and actual distressed lane miles from the
last three completed pavement-condition surveys:
Condition
Assessment
Date
Established Condition
Baseline Distressed
Lane Miles
(maximum) ^
Actual
Distressed
Lane Miles
Actual Distressed
Lane Miles as Percent
of Total Lane Miles
March 2008
December 2011 ^
December 2013
18,000
18,000
18,000
12,998
12,333
7,820
26.3 %
24.9
15.7
* Condition assessment for the State’s established condition baseline and actual distressed lane miles is being reported as of the
State of the Pavement report publication date.
^ The actual statewide distressed lane miles should not exceed the maximum distressed lane miles established by the State.
^ The State’s compliance with GASB 34, which requires a road condition assessment every three years, temporarily lapsed in March 2011.
The following table provides details on the State’s actual distressed lane miles as of the last completed
pavement-condition survey:
Pavement Condition
Lane Miles
Distressed Lane Miles
Excellent/Good
Fair
Poor
Total
41,898
2,483
5,337
49,718
2,483
5,337
7,820
C. Budgeted and Actual Preservation Costs
The estimated budgeted preservation costs represent the preservation projects approved by the California
Transportation Commission and the State’s scheduled preservation work for each fiscal year. The actual
preservation costs represent the cumulative cost to date for the projects approved and work scheduled in each
fiscal year.
The State’s budgeted and actual preservation cost information for the most recent and four previous fiscal
years is shown in the following table:
Estimated Budgeted Actual
Liscal Year Preservation Costs Preservation Costs
Ended June 30 _ (in millions) _ _ (in millions)
2010
$ 2,162
$ 698
2011
2,802
1,394
2012
2,722
1,806
2013
1,598
989
2014
2,069
612
145
State of California Comprehensive Annual Financial Report
Budgetary Comparison Schedule
General Fund and Major Special Revenue Funds
Year Ended June 30, 2014
(amounts in thousands)
REVENUES
Corporation tax.
Intergovernmental.
Cigarette and tobacco taxes.
Inheritance, estate, and gift taxes.
Insurance gross premiums tax.
Vehicle license fees.
Motor vehicle fuel tax.
Personal income tax.
Retail sales and use taxes.
Other major taxes and licenses.
Other revenues.
Total revenues.
EXPENDITURES
State and consumer services.
Business and transportation.
Resources.
Health and human services.
Correctional programs.
Education.
General government:
Tax relief.
Debt service.
Other general government.
Total expenditures..
OTHER FINANCING SOURCES (USES)
Transfers from other funds.
Transfers to other funds.
Other additions and deductions.
Total other llnancing sources (uses).
Excess (deficiency) of revenues and other sources
over (under) expenditures and other uses.
Fund balances - beginning.
Fund balances - ending.
General
Budgeted Amounts
Actual
Variance With
Original
Final
Amounts
Final Budget
$ 7,971,000
$ 8,107,000
$ 8,724,718
$ 617,718
89,000
86,000
86,378
378
2,143,000
2,287,000
2,362,738
75,738
19,985
19,985
21,833
1,848
64,287,000
66,522,000
66,782,714
260,714
22,920,000
22,759,000
22,250,163
(508,837)
351,200
352,200
355,367
3,167
2,019,723
1,704,815
1,835,678
130,863
99,800,908
101,838,000
102,419,589
581,589
14,081
13,593
11,483
2,110
91,052
91,118
91,073
45
1,109,179
1,262,638
1,208,336
54,302
27,518,481
29,390,387
28,591,476
798,911
8,610,145
9,348,790
9,184,218
164,572
48,408,996
49,570,274
49,546,886
23,388
421,734
425,256
421,734
3,522
4,800,543
4,800,543
4,751,765
48,778
4,327,934
4,478,542
4,201,023
277,519
95,302,145
99,381,141
98,007,994
1,373,147
1,154,221
—
—
(1,338,685)
—
—
—
(102,379)
—
—
—
(286,843)
—
_
_
4,124,752
_
—
—
4,285,137
—
$ —
$ —
$ 8,409,889
$ —
146
Required Supplementary Information
Federal
Transportation
Budgeted Amounts
Actual
Variance With
Budgeted Amounts
Actual
Variance With
Original
Final
Amounts
Final Bndget
Original
Final
Amounts
Final Bndget
$ —
$
$ —
$ —
$ —
$
$ —
$ —
60,477,098
60,477,098
60,477,098
—
—
—
—
—
—
—
—
—
6,026,194
6,014,023
6,065,747
51,724
—
—
—
—
3,796,510
3,859,470
3,900,966
41,496
26
26
26
—
400,774
461,636
385,002
(76,634)
60,477,124
60,477,124
60,477,124
—
10,223,478
10,335,129
10,351,715
16,586
5,411
5,411
5,411
115,770
115,770
102,987
12,783
5,069,737
5,069,737
5,069,737
—
11,587,798
11,555,219
10,523,981
1,031,238
259,979
259,979
259,979
—
234,072
234,155
233,369
786
44,172,988
44,172,988
44,172,988
—
3,418
3,418
2,656
762
88,228
88,228
88,228
—
—
—
—
—
6,727,357
6,727,357
6,727,357
—
2,649
2,649
2,118
531
—
—
—
—
686
2,350
1,399
951
962,624
962,624
962,624
—
665,866
666,600
658,196
8,404
57,286,324
57,286,324
57,286,324
—
12,610,259
12,580,161
11,524,706
1,055,455
8,461,005
18,492,786
—
—
(11,636,639)
—
—
—
(21,415,565)
—
—
—
(16,758)
—
—
—
(1,116,593)
—
—
—
(3,192,392)
—
—
—
(4,039,372)
—
_
_
(1,592)
_
_
_
(5,212,363)
_
—
—
10,769
—
—
—
22,442,954
—
$ —
$
—
$ 9,177
$ —
$ —
$
—
$ 17,230,591
$ —
(continued)
147
State of California Comprehensive Annual Financial Report
Budgetary Comparison Schedule (continued)
General Fund and Major Special Revenue Funds
Year Ended June 30, 2014
(amounts in thousands)
Environmental and Natural Resources
Budgeted Amounts
Actual
Variance With
Original Final
Amounts
Final Budget
REVENUES
Corporation tax.
. $
—
$
—
$
— $
—
Intergovernmental.
—
—
—
—
Cigarette and tobacco taxes.
—
—
—
—
Inheritance, estate, and gift taxes.
—
—
—
—
Insurance gross premiums tax.
—
—
—
—
Vehicle license fees.
—
—
—
—
Motor vehicle fuel tax.
—
—
—
—
Personal income tax.
—
—
—
—
Retail sales and use taxes.
—
—
—
—
Other major taxes and licenses.
153,108
153,108
153,108
—
Other revenues.
3,464,344
3,464,344
3,464,344
—
Total revenues.
3 , 617,452
3 , 617,452
3 , 617,452
—
EXPENDITURES
State and consumer services.
79,501
79,501
64,120
15,381
Business and transportation.
8,928
8,928
8,928
—
Resources.
4,784,304
4,523,630
4,047,506
476,124
Health and human services.
218,588
170,386
106,722
63,664
Correctional programs.
—
—
—
—
Education.
16,140
16,140
14,089
2,051
General government:
Tax relief.
—
—
—
—
Debt service.
—
—
—
—
Other general government.
122,080
110,587
89,814
20,773
Total expenditures..
5 , 229,541
4 , 909,172
4 , 331,179
577,993
OTHER FINANCING SOURCES (USES)
Transfers from other funds.
—
—
896,385
—
Transfers to other funds.
—
—
(740,256)
—
Other additions and deductions.
—
—
54,934
—
Total other llnancing sources (uses).
—
—
211,063
—
Excess (deficiency) of revenues and other sources
over (under) expenditures and other uses.
—
—
(502,665)
—
Fund balances - beginning.
_
_
12 , 029,423 *
_
Fund balances - ending.
. $
—
$
—
$
11 , 526,758 $
—
* Restated
(concluded)
148
Required Supplementary Information
Reconciliation of Budgetary Basis Fund Balances
of the General Fund and the Major Special Revenue Funds
to GAAP Basis Fund Balances
June 30,2014
(amounts in thousands)
Major Special Revenue Funds
Environmental
and Natural
General
Federal
Transportation
Resources
Budgetary fund balance reclassified into
GAAP statement fund structure.
. $ 8,409,889
$ 9,177
$
17,230,591
$ 11,526,758
Basis difference:
Interfiind receivables.
. 49,234
—
3,354,281
829,227
Loans receivable.
. 126,121
201,804
—
1,113,482
Interfiind payables.
. (6,123,537)
—
(2,316)
(25,000)
Escheat property.
. (820,249)
—
—
—
Bonds authorized but unissued.
. —
—
(15,119,755)
(5,751,377)
Tax revenues.
. (717,500)
—
—
—
Fund classification changes.
. 447,754
1,593
—
—
Other.
. 4,363
—
2,529,013
12,808
Timing difference:
Liabilities budgeted in subsequent years.
. (8,820,671)
(1,000)
(525,590)
(75,344)
GAAP fund balance (deficit) - ending.
. $ (7,444,596)
$ 211,574
$
7,466,224
$ 7,630,554
Notes to the Required Supplementary Information
Budgetary Comparison Schedule
The State annually reports its financial condition based on a Generally Accepted Accounting Principles
(GAAP) basis and on the State’s budgetary provisions (budgetary basis). The Budgetary Comparison
Schedule for the General Fund and Major Special Revenue Funds reports the original budget, the final budget,
the actual expenditures, and the variance between the final budget and the actual expenditures, using the
budgetary basis of accounting.
On the budgetary basis, individual appropriations are charged as expenditures when commitments for goods
and services are incurred. However, for financial reporting purposes, the State reports expenditures based on
the year in which goods and services are received. The Budgetary Comparison Schedule includes all of the
current year expenditures for the General Fund and major special revenue funds as well as related
appropriations that are typically legislatively authorized annually, continually, or by project. While the
encumbrances relate to all programs’ expenditures on a budgetary basis, adjustments for encumbrances are
budgeted under other general government.
149
State of California Comprehensive Annual Financial Report
The Budgetary Comparison Sehedule is not presented in this document at the legal level of budgetary control
because such a presentation would be extremely lengthy and cumbersome. The State of California prepares a
separate report, the Comprehensive Annual Financial Report Supplement, which includes statements that
demonstrate compliance with the legal level of budgetary control in accordance with Government Accounting
Standards Board’s (GASB) Codification of Governmental Accounting and Financial Reporting Standards,
Section 2400.121. The supplement includes a comparison of the annual appropriated budget with
expenditures at the legal level of control. A copy of the Comprehensive Annual Financial Report Supplement
is available by emailing the State Controller’s Office, Division of Accounting and Reporting at
StateGovReports@sco.ca.gov.
Reconciliation of Budgetary With GAAP Basis
The reconciliation of budgetary basis fund balances of the General Fund and the major special revenue funds
to GAAP basis fund balances is presented on the previous page and the reconciling items are explained in the
following paragraphs.
The beginning fund balance for the General Fund on the budgetary basis is restated for prior year revenue
adjustments and prior year expenditure adjustments. A prior year revenue adjustment occurs when the actual
amount received in the current year differs from the amount of revenue accrued in the prior year. A prior year
expenditure adjustment results when the actual amount paid in the current year differs from the prior year
accrual for appropriations for which the ability to encumber funds has lapsed in previous periods. The
beginning fund balance on a GAAP basis is not affected by these adjustments.
Basis Difference
Interfund Receivables and Loans Receivable'. Loans made to other funds or to other governments are
normally recorded as either expenditures or transfers on a budgetary basis. Flowever, in accordance with
GAAP, these loans are recorded as assets. The adjustments related to interfiind receivables caused a
$49 million increase to the fund balance in the General Fund, a $3.4 billion increase to the fund balance in the
Transportation Fund, and a $829 million increase to the fund balance in Environmental and Natural Resources
Fund. The adjustments related to loans receivable caused increases of $126 million in the General Fund,
$202 million in the Federal Fund, and $1.1 billion in Environmental and Natural Resources Fund.
Interfund Payables: Eoans received from other funds or from other governments are normally recorded as
either revenues or transfers on a budgetary basis. Flowever, in accordance with GAAP, these loans are
recorded as liabilities. The adjustments related to interfund payables caused a $6.1 billion decrease to the
budgetary fund balance in the General Fund, $2 million decrease to the Transportation Fund, and $25 million
decrease to the Environmental and Natural Resources Fund.
Escheat Property: A liability for the estimated amount of escheat property expected to ultimately be
reclaimed and paid is not reported on a budgetary basis. The liability is required to be reported on a GAAP
basis. This adjustment caused a $820 million decrease to the General Fund balance.
Bonds Authorized but Unissued: In the year that general obligation bonds are authorized by the voters, the
full amount authorized is recognized as revenue on a budgetary basis. In accordance with GAAP, only the
amount of bonds issued each year is reported as an other financing source. The adjustments related to bonds
authorized but unissued caused a $15.1 billion decrease to the fund balance in the Transportation Fund and a
$5.8 billion decrease in the Environmental and Natural Resources Fund.
150
Required Supplementary Information
Tax Revenues: Estimated tax payments are accrued on a budgetary basis pursuant to Chapter 751, Statutes of
2008. However, in accordance with GAAP, tax payments are accrued based on the portion of estimated net
final payments related to the fiscal year. This adjustment caused a fund balance decrease of $718 million in
the General Fund.
Fund Classification Changes: The fund balance amounts for governmental funds have been reclassified in
accordance with governmental accounting standards. These reclassifications caused fund balance increases of
$448 million in the General Fund and $2 million in the Federal Fund. These increases represent the fund
balances of funds that are not considered part of the General Fund or the Federal Fund, respectively, for any
budgetary purpose or for the Budgetary/Fegal Basis Annual Report.
Other: Certain other adjustments and reclassifications are necessary in order to present the financial
statements in accordance with GAAP. The other adjustments caused a fund balance increases of $5 million in
the General Fund, $2.5 billion in the Transportation Fund, and $13 million in the Environmental and Natural
Resources Fund.
Timing Difference
Liabilities Budgeted in Subsequent Years: On a budgetary basis, the primary government does not accrue
liabilities for which there is no existing appropriation or no currently available appropriation. The adjustments
made to account for these liabilities in accordance with GAAP caused fund balance decreases of $8.8 billion
in the General Fund, $1 million in the Federal Fund, $526 million in the Transportation Fund, and $75 million
in the Environmental and Natural Resources Fund. The large decrease in the General Fund primarily consists
of $3.9 billion for deferred apportionment payments to K-12 schools and community colleges, $2.8 billion for
medical assistance, $989 million for June 2014 payroll that was deferred to July 2014, $555 million for
pension contributions, $284 million for workers’ compensation claims, and $191 million in tax overpayments.
151
State of California Comprehensive Annual Financial Report
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152
Combining Financiai
Statements and
Scheduies - Nonmajor
and Other Funds
State of California Comprehensive Annual Financial Report
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154
Nonmajor Governmental Funds
Nonmajor governmental funds account for the State’s activities that do not meet the criteria of a
major governmental fund. Following are brief descriptions of nonmajor governmental funds.
Special revenue funds account for the proceeds of specific revenue sources, other than debt service or
capital projects, that are restricted or committed to expenditures for specific purposes.
The Business and Professions Regulatory and Licensing Fund accounts for fees and other
revenues charged for regulating and licensing specific industries, professions, and vocations.
The Financing for Local Governments and the Public Fund accounts for taxes, fees, bond
proceeds, and other revenues that are used to finance the construction and maintenance of parks,
jails, and other public and local government programs.
The Cigarette and Tobacco Tax Fund accounts for a surtax on cigarette and tobacco products that
is used for various health programs.
The Local Revenue and Public Safety Fund accounts for vehicle license fees and a 1.5625%
state sales tax that is dedicated to local governments for realigning costs from the State to local
governments and a 0.5% state sales tax that is dedicated to local governments to fund public safety
programs.
The Health Care Related Programs Fund accounts for fees, taxes, bond proceeds, transfers from
the Federal Trust Fund and other state funds, and other revenues that are used for the Medi-Cal and
Healthy Families programs, medical research, and other health and human services programs.
The Trial Courts Fund accounts for the various fees collected by the courts, maintenance-of-
effort payments from the counties, transfers in from the General Fund, and trial court operating
costs.
The Golden State Tobacco Securitization Corporation Fund is a blended component unit that
accounts for the receipt of Tobacco Revenue Settlements pledged for the payment of debt service.
Other special revenue programs funds account for all other proceeds of revenue sources, other
than debt service or capital projects, that are restricted or committed to expenditures for specific
purposes.
Debt service funds account for and report financial resources that are restricted, committed, or
assigned for the payment of principal and interest on general long-term obligations.
The Economic Recovery Bond Sinking Fund accounts for General Fund transfers, proceeds from
the sale of surplus property, and the 0.25% sales and use tax revenue collected for the payment of
principal, interest, and other related costs of the Economic Recovery Bonds.
(continued)
155
State of California Comprehensive Annual Financial Report
(continued)
The Transportation Debt Service Fund accounts for Transportation Fund transfers used for the
payment of principal and interest related to various transportation-related general obligation bonds.
Capital projects funds account for and report financial resources that are restricted, committed, or
assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities
and other capital assets.
The Higher Education Construction Fund accounts for bond proceeds used to construct state
colleges and universities.
The Hospital Construction Fund accounts for bond proceeds that are used to construct hospitals.
The Local Government Construction Fund accounts for bond proceeds that are used to construct
schools, libraries, and other major capital facilities for local governments.
Building authorities are blended component units that are created by joint-powers agreements
between local governments and the State or other local governments for the purpose of financing
the construction of state buildings. The funds account for bond proceeds used to finance and
construct state buildings and parking facilities.
Other capital projects funds account for transactions related to resources that are restricted,
committed, or assigned to expenditure for capital outlays, including the acquisition or construction
of capital facilities and other capital assets.
156
Nonmajor Governmental Funds
This page intentionally left blank
157
State of California Comprehensive Annual Financial Report
Combining Balance Sheet
Nonmajor Governmental Funds
June 30,2014
(amounts in thousands)
ASSETS
Cash and pooled investments.
Investments.
Receivables (net).
Due from other funds.
Due from other governments.
Interfund receivables.
Loans receivable.
Other assets.
Total assets.
LIABILITIES
Accounts payable.
Due to other funds.
Due to other governments.
Interfund payables.
Revenues received in advance.
Deposits.
Interest payable.
General obligation bonds payable.
Other liabilities.
Total liabilities.
DEFERRED INFLOWS OF RESOURCES.
Total liabilities and deferred inflows of resources
FUND BALANCES
Nonspendable.
Restricted.
Committed.
Assigned.
Unassigned.
Total fund balances.
Total liabilites, deferred inflows of resources,
and fund balances.
Business and
Professions
Regulatory
and Licensing
$
1,169,322
77,423
33,410
14,372
266,142
188,887
428
$
1 , 749,984
$
50,146
34,584
335
2,405
35,018
370
44,624
167,482
—
167,482
856,450
726,052
1 , 582,502
$
1 , 749,984
Special Revenue
Financing
for Local
Governments
and tbe Public
$
931,273
18,927
502,541
307,299
215,178
2,395,746
$
4 , 370,964
$
132,707
305,991
181,145
1,828
388
622,059
—
622,059
3,445,078
310,685
(6,858)
3 , 748,905
$
4 , 370,964
Cigarette
and
Tobacco Tax
$
430,051
317,327
5,891
$
753,269
$
75,107
13,597
101,378
4
190,086
260,517
450,603
302,666
302,666
$
753,269
158
Nonmajor Governmental Funds
Special Revenue
Local
Revenue and
Public Safety
Health
Care Related
Programs
Trial
Courts
Golden State
Tobacco
Securitization
Corporation
Other
Special
Revenue
Programs
Total
Nonmajor
Special
Revenue
$
2,744,756
$
832,942
$
1,014,499
$
154,127
$
1,597,334
$
8,874,304
—
—
134,745
499,478
—
634,223
68,301
2,274,615
298,007
202,884
141,660
3,399,144
27,805
230,209
197
—
333,128
1,133,181
—
1,767
26,989
—
57,401
407,828
—
12,000
440,000
—
399,400
1,332,720
—
39,200
—
—
11,176
2,635,009
—
—
30,053
—
—
30,481
$
2,840,862
$
3,390,733
$
1,944,490
$
856,489
$
2,540,099
$
18,446,890
$
6,670
$
155,486
$
242,811
$
120
$
246,094
$
909,141
30,330
2,336,562
1,116
—
37,354
2,759,534
2,756,627
34,956
132,940
—
304,800
3,512,181
—
—
—
—
6,179
8,584
—
10,432
16,067
—
29,786
93,131
—
—
373,441
—
18,353
392,164
—
126
81,490
—
13,762
140,394
2 , 793,627
2 , 537,562
847,865
120
656,328
7 , 815,129
—
—
—
—
5,273
265,790
2 , 793,627
2 , 537,562
847,865
120
661,601
8 , 080,919
27,260
27,260
8,549
764,618
942,398
856,369
1,632,349
8,808,477
38,686
88,553
108,110
—
247,772
1,519,858
—
—
18,857
—
—
18,857
—
—
—
—
(1,623)
(8,481)
47,235
853,171
1 , 096,625
856,369
1 , 878,498
10 , 365,971
$
2 , 840,862
$
3 , 390,733
$
1 , 944,490
$
856,489
$
2 , 540,099
$
18 , 446,890
(continued)
159
State of California Comprehensive Annual Financial Report
Combining Balance Sheet (continued)
Nonmajor Governmental Funds
June 30,2014
(amounts in thousands)
Debt Service
Economic
Total
Recovery
Transportation
Nonmajor
Bond
Debt
Debt
Sinking
Service
Service
ASSETS
Cash and pooled investments .
. $
1,882,054
$
—
$
1,882,054
Investments .
—
—
—
Receivables (net) .
57,662
—
57,662
Due from other funds .
39,694
—
39,694
Due from other governments .
—
—
—
Interfund receivables .
—
—
—
Loans receivable .
—
—
—
Other assets .
—
—
—
Total assets.
. $
1,979,410
$
—
$
1,979,410
LIABILITIES
Accounts payable .
. $
298
$
—
$
298
Due to other funds .
—
—
—
Due to other governments .
—
—
—
Interfiind payables .
—
—
—
Revenues received in advance .
—
—
—
Deposits .
—
—
—
Interest payable .
111,155
—
111,155
General obligation bonds payable .
1,164,630
—
1,164,630
Other liabilities .
—
—
—
Total liabilities.
1,276,083
—
1,276,083
DEFERRED INFLOWS OF RESOURCES.
—
—
—
Total liabilities and deferred inflows of resources.
1,276,083
_
1,276,083
FUND BALANCES
Nonspendable.
—
—
—
Restricted.
703,327
—
703,327
Committed.
—
—
—
Assigned.
—
—
—
Unassigned.
—
—
—
Total fund balances.
703,327
_
703,327
Total liabilites, deferred inflows of resources,
and fund balances.
. $
1,979,410
$
_
$
1,979,410
160
Nonmajor Governmental Funds
Capital Projects
Total
Higher
Local
Other
Nonmajor
Total
Education
Hospital
Government
Building
Capital
Capital
Nonmajor
Construction
Construction
Construction
Authorities
Projects
Projects
Governmental
$ 297,765
$
47,699
$
363,649
$ 43,779
$
78,792
$
831,684
$
11,588,042
—
—
—
—
—
—
634,223
10
16
—
—
74
100
3,456,906
129
30
229
20,836
12,096
33,320
1,206,195
—
—
3,936
—
—
3,936
411,764
—
—
—
—
—
—
1,332,720
—
—
—
—
—
—
2,635,009
—
—
—
—
—
—
30,481
$ 297,904
$
47,745
$
367,814
$ 64,615
$
90,962
$
869,040
$
21,295,340
$ 2,072
$
8,036
$
7,495
$ —
$
7,740
$
25,343
$
934,782
620
—
2,724
—
2,941
6,285
2,765,819
—
—
2,651
—
85
2,736
3,514,917
8,584
93,131
—
—
—
—
—
—
—
—
—
—
—
—
392,164
—
—
—
2,514
—
2,514
113,669
—
—
—
—
—
—
1 , 164,630
—
—
—
—
—
—
140,394
2,692
8,036
12,870
2,514
10,766
36,878
9,128,090
—
—
—
—
—
—
265,790
2,692
8,036
12,870
2,514
10,766
36,878
9,393,880
27,260
295,212
39,709
354,944
62,101
73,784
825,750
10 , 337,554
—
—
—
—
6,412
6,412
1 , 526,270
—
—
—
—
—
—
18,857
—
—
—
—
—
—
( 8 , 481 )
295,212
39,709
354,944
62,101
80,196
832,162
11,901,460
$ 297,904
$
47,745
$
367,814
$ 64,615
$
90,962
$
869,040
$
21,295,340
(concluded)
161
State of California Comprehensive Annual Financial Report
Combining Statement of Revenues, Expenditures
and Changes in Fund Balances
Nonmajor Governmental Funds
Year Ended June 30, 2014
(amounts in thousands)
REVENUES
Personal income taxes.
Sales and use taxes.
Insurance taxes.
Other taxes.
Intergovernmental.
Licenses and permits.
Charges for services.
Fees.
Penalties.
Investment and interest.
Escheat.
Other.
Total revenues.
EXPENDITURES
Current:
General government.
Education.
Health and human services.
Resources.
State and consumer services.
Business and transportation.
Correctional programs.
Capital outlay.
Debt service:
Bond and commercial paper retirement.
Interest and fiscal charges.
Total expenditures.
Excess (deficiency) of revenues over (under) expenditures ....
OTHER FINANCING SOURCES (USES)
General obligation bonds and commercial paper issued.
Refunding debt issued.
Payment to refund long-term debt.
Premium on bonds issued.
Transfers in.
Transfers out.
Total other Ilnancing sources (uses).
Net change in fund balances.
Fund balances - beginning.
Fund balances - ending.
* Restated
Special Revenue
Business and
Professions
Regulatory
and Licensing
Financing
for Local
Governments
and the Public
Cigarette
and
Tobacco Tax
$ —
$ 1,187,411
$ —
95,996
604,240
734,870
—
687,168
—
363,006
18,803
—
38,704
2,856
490
925,070
554
24
9,045
10,739
—
32,404
2,654
968
63
—
—
12,694
20,293
208
1,476,982
2,534,718
736,560
554,513
551,123
17,352
17,772
317
17,072
294,888
2,000,418
575,966
51,679
85,218
12,082
428,173
—
—
80,655
184,794
—
—
101,043
—
—
225
—
—
5,135
—
—
63
—
1 , 427,680
2 , 928,336
622,472
49,302
(393,618)
114,088
50,000
—
4,660
—
—
534
—
19,532
585,946
—
(16,626)
(24,644)
(82,871)
2,906
616,496
( 82 , 871 )
52,208
222,878
31,217
1 , 530,294
3 , 526,027 *
271,449
$ 1 , 582,502 $
3 , 748,905 $
302,666
162
Nonmajor Governmental Funds
Special Revenue
Local
Revenue and
Public Safety
Health
Care Related
Programs
Trial
Courts
Golden State
Tobacco
Securitization
Corporation
Other
Special
Revenue
Programs
Total
Nonmajor
Special
Revenue
$ —
$ — $
$ —
$ —
$ 1,187,411
11,977,469
—
—
—
—
11,977,469
—
986,717
—
—
—
986,717
—
—
—
—
296
1,435,402
—
139,479
809,027
—
—
1,635,674
2,135,720
3
—
—
10,757
2,528,289
—
75
56,050
—
160,146
258,321
—
3,764,500
629,299
—
986,712
6,306,159
—
10,175
510,942
—
275,285
816,186
506
3,391
2,921
811
6,054
49,709
—
—
1,008
—
3
1,074
—
318,153
142,960
355,107
319,604
1,169,019
14,113,695
5,222,493
2,152,207
355,918
1,758,857
28,351,430
4,012,410
350
2,971,498
—
1,034,702
9,141,948
—
194,082
—
—
7,292
236,535
8,883,546
4,954,153
—
—
650,685
17,359,656
—
152
—
—
49,149
198,280
—
—
195
—
10,009
438,377
—
—
—
—
10,241
275,690
1,217,699
—
—
—
30,104
1,348,846
225
227,475
50,910
72,414
355,934
—
264
—
325,884
22,309
348,520
14 , 113,655
5 , 376,476
2 , 971,693
376,794
1 , 886,905
29 , 704,011
40
(153,983)
(819,486)
(20,876)
(128,048)
(1,352,581)
462,360
512,360
—
—
—
—
—
4,660
—
465
—
—
—
999
558
178,807
863,654
—
19,347
1,667,844
—
(8,750)
(200,000)
—
(51,043)
(383,934)
558
632,882
663,654
—
( 31 , 696 )
1 , 801,929
598
478,899
(155,832)
(20,876)
(159,744)
449,348
46,637
374,272
1 , 252,457
877,245 *
2 , 038,242
9 , 916,623
$ 47,235 $
853,171 $
1 , 096,625 $
856,369 $
1 , 878,498 $
10 , 365,971
(continued)
163
State of California Comprehensive Annual Financial Report
Combining Statement of Revenues, Expenditures
and Changes in Fund Balances (continued)
Nonmajor Governmental Funds
Year Ended June 30, 2014
(amounts in thousands)
REVENUES
Personal income taxes.
Sales and use taxes.
Insurance taxes.
Other taxes.
Intergovernmental.
Licenses and permits.
Charges for services.
Fees.
Penalties.
Investment and interest.
Escheat.
Other.
Total revenues.
EXPENDITURES
Current:
General government.
Education.
Health and human services.
Resources.
State and consumer services.
Business and transportation.
Correctional programs.
Capital outlay.
Debt service:
Bond and commercial paper retirement.
Interest and fiscal charges.
Total expenditures.
Excess (deficiency) of revenues over (under) expenditures
OTHER FINANCING SOURCES (USES)
General obligation bonds and commercial paper issued.
Refunding debt issued.
Payment to refund long-term debt.
Premium on bonds issued.
Transfers in.
Transfers out.
Total other Ilnancing sources (uses).
Net change in fund balances.
Fund balances - beginning..
Fund balances - ending.
* Restated
Debt Service
Economic
Total
Recovery
Transportation
Nonmajor
Bond
Debt
Debt
Sinking
Service
Service
$ —
$ —
$ —
1,505,455
—
1,505,455
2,711
—
2,711
57,832
_
57,832
1,565,998
—
1,565,998
17,102
—
17,102
1,314,630
321,038
1,635,668
222,279
714,302
936,581
1,554,011
1,035,340
2,589,351
11,987
(1,035,340)
(1,023,353)
_
1,035,340
1,035,340
—
1,035,340
1,035,340
11,987
691,340 *
—
11,987
691,340
$
703,327 $
— $
703,327
164
Nonmajor Governmental Funds
Capital Projects
Total
Higher
Local
Other
Nonmajor
Total
Education
Hospital
Government
Building
Capital
Capital
Nonmajor
Construction
Construction
Construction
Authorities
Projects
Projects
Governmental
$ —
$ —
$ —
$ —
$ —
$ —
$ 1,187,411
—
—
—
—
—
—
13,482,924
—
—
—
—
—
—
986,717
—
—
—
—
—
—
1,435,402
—
—
—
—
—
—
1,635,674
—
—
—
—
1,067
1,067
2,529,356
—
—
—
—
—
—
258,321
—
—
—
—
—
—
6,306,159
—
—
—
—
—
—
816,186
658
129
3,143
132
42
4,104
56,524
1,074
1,229,474
58
_
_
_
2,565
2,623
716
129
3,143
132
3,674
7,794
29,925,222
—
61,192
—
—
—
61,192
9,220,242
—
—
692,298
—
—
692,298
928,833
—
—
—
—
—
—
17,359,656
—
—
—
—
36,630
36,630
234,910
—
—
—
—
—
—
438,377
—
—
—
—
—
—
275,690
—
—
—
—
—
—
1,348,846
150,306
397
14,429
—
4,296
169,428
169,653
137,305
15,140
1,748,085
39,895
7,605
1,948,030
3,939,632
2,906
12
26,711
29,882
149
59,660
1,344,761
290,517
76,741
2,481,523
69,777
48,680
2,967,238
35,260,600
(289,801)
(76,612)
(2,478,380)
(69,645)
(45,006)
(2,959,444)
(5,335,378)
215,585
52,245
905,910
_
2,275
1,176,015
1,688,375
287,765
—
1,330,935
—
6,985
1,625,685
1,630,345
(173,373)
—
—
—
—
(173,373)
(173,373)
23,902
2,057
150,885
—
769
177,613
178,612
—
—
—
53,025
48,458
101,483
2,804,667
—
—
(16)
—
—
(16)
(383,950)
353,879
54,302
2,387,714
53,025
58,487
2,907,407
5,744,676
64,078
(22,310)
(90,666)
(16,620)
13,481
(52,037)
409,298
231,134
62,019
445,610
78,721
66,715
884,199
11,492,162
$ 295,212 $
39,709 $
354,944 $
62,101 $
80,196 $
832,162 $
11,901,460
(concluded)
165
State of California Comprehensive Annual Financial Report
Budgetary Comparison Schedule
Budgetary Basis
Nonmajor Governmental Funds*
Year Ended June 30, 2014
(amounts in thousands)
REVENUES
Cigarette and tobacco taxes.
Vehicle license fees.
Personal income tax.
Retail sales and use taxes.
Other major taxes and licenses.
Other revenues.
Total revenues.
EXPENDITURES
State and consumer services.
Business and transportation.
Resources.
Health and human services.
Correctional programs.
Education.
General government:
Tax relief.
Other general government.
Total expenditures.
OTHER EINANCING SOURCES (USES)
Transfers from other funds.
Transfers to other funds.
Other additions and deductions.
Total other financing sources (uses).
Excess of revenues and other sources over
expenditures and other uses.
Eund balances - beginning.
Eund balances - ending.
Budget
Actual
Variance with
Amounts
Amounts
Einal Budget
$
481,377
$
481,377
$ —
1,611,149
1,611,149
—
1,187,411
1,187,411
—
13,637,924
13,637,924
—
841,449
841,449
—
10,351,442
10,351,442
—
28,110,752
28,110,752
—
481,590
445,721
35,869
1,346,118
1,333,793
12,325
204,189
185,353
18,836
20,392,561
19,076,855
1,315,706
133,217
132,752
465
853,265
784,888
68,377
582
582
_
9,483,546
9,174,497
309,049
32,895,068
31,134,441
1,760,627
_
24,566,450
_
—
(22,052,439)
—
844,642
—
3,358,653
—
334,964
—
11,654,326
—
$
—
$
11,989,290
$ -
* On a budgetary basis, the State’s funds are classified as either governmental cost funds or nongovernmental cost funds. The
governmental cost funds include the General Eund, most of the funds that comprise the Transportation Eund and the Environmental
and Natural Resources Eund, and many other funds that make up the nonmajor governmental funds reported in these financial
statements. Governmental cost funds derive their revenue from taxes, licenses, and fees that support the general operations of the
State. The appropriations of the budgetary basis governmental cost funds form the annual appropriated budget of the State.
Nongovernmental cost funds consist of funds that derive their receipts from sources other than general and special taxes, licenses,
fees, or state revenues and mainly represent the proprietary and fiduciary funds reported in these financial statements. Expenditures
of these funds do not represent a cost of government and most of the nongovernmental cost funds are not included in the annual
appropriated budget. Therefore, the expenditures of these funds are not included in this schedule. The Federal Fund is one
nongovernmental cost fund that is included in the annual appropriated budget. The Budgetary Comparison Schedule for the General
Fund, Federal Fund, Transportation Fund, and Environmental and Natural Resources Fund is included in the Required
Supplementary Information section; the remaining governmental cost funds are reflected in this schedule. Additional information on
the budgetary basis of accounting can be found in the Management’s Discussion and Analysis, Note 2, Budgetary and Legal
Compliance, notes to the Required Supplementary Information, and in the separately issued Comprehensive Annual Financial
Report Supplement.
166
Internal Service Funds
Internal service funds account for state activities that provide goods and services to other state
departments or agencies on a cost reimbursement basis. Following are brief descriptions of the internal
service funds.
The Public Buildings Construction Fund accounts for rental charges from the lease of public
assets and the related lease-purchase revenue bonds. This fund was reclassified from an enterprise
fund to an internal service fund this fiscal year.
The Architecture Revolving Fund accounts for charges for the costs of architectural services,
construction, and improvements.
The Service Revolving Fund accounts for charges for printing and procurement services rendered
by the Department of General Services for state departments and other public entities.
The Prison Industries Fund accounts for charges for goods produced by inmates in state prisons
that are sold to state departments and other governmental entities.
The Financial Information Systems Fund accounts for charges for the development and
subsequent use of the State's new financial information system. This was previously reported in the
Other Internal Service Programs column.
The Technology Services Revolving Fund accounts for charges for technology services
performed for various state, federal, and local government entities by the California Technology
Agency.
The Water Resources Revolving Fund accounts for charges for administrative services related to
water delivery provided by the Department of Water Resources to federal, state, and local
government agencies.
Other internal service program funds account for all other goods and services provided to other
agencies, departments, or governments on a cost-reimbursement basis.
167
State of California Comprehensive Annual Financial Report
Combining Statement of Net Position
Internal Service Funds
June 30,2014
(amounts in thousands)
ASSETS
Current assets:
Cash and pooled investments.
Restricted assets:
Cash and pooled investments.
Net investment in direct financing leases.
Receivables (net).
Due from other funds.
Due from other governments.
Prepaid items.
Inventories.
Total current assets.
Noncurrent assets:
Restricted assets:
Cash and pooled investments.
Net investment in direct financing leases.
Interfund receivables.
Long-term prepaid charges .
Capital assets:
Land.
Buildings and other depreciable property.
Intangible assets - amortizable.
Less: accumulated depreciation/amortization.
Construction in progress.
Intangible assets - non-amortizable.
Total noncurrent assets.
Total assets.
DEFERRED OUTFLOWS OF RESOURCES.
Total assets and deferred outflows of resources
Public
Buildings
Architecture
Construction
Revolving
$ — $
274,968
3,339,603
—
406,075
—
—
26
215,923
13,994
—
12,387
3,961,601
301,375
402,394
—
6,576,903
—
8,329
—
—
409
—
(409)
941,012
—
7,928,638
—
11,890,239
301,375
118,169
—
$ 12,008,408 $
301,375
168
Internal Service Funds
Other
Financial
Technology
Water
Internal
Service
Prison
Information
Services
Resources
Service
Revolving
Industries
Systems
Revolving
Revolving
Programs
Total
$ 82,885 $
168,509 $
44,018 $
47,973 $
14,053 $
362,669 $
995,075
—
—
—
—
—
—
3,339,603
—
—
—
—
—
—
406,075
8,674
1,831
8
86,199
12,929
267
109,934
26,331
1,667
2,869
50,936
75,521
54,681
441,922
19,878
307
—
797
—
60
21,042
93,435
282
6,478
573
11,064
159
124,378
8,011
37,805
—
29,901
983
—
76,700
239,214
210,401
53,373
216,379
114,550
417,836
5,514,729
—
—
—
—
—
—
402,394
—
—
—
—
—
—
6,576,903
—
—
—
—
—
15,774
15,774
8,329
2,312
2,312
134,941
157,940
1,872
324,516
30,264
10,545
660,487
9,252
3,672
11
50,282
—
—
63,217
(112,282)
(116,709)
(888)
(278,786)
(30,264)
(6,511)
(545,849)
—
234
—
—
—
140
941,386
—
—
91,167
—
—
—
91,167
31,911
45,137
92,162
96,012
—
22,260
8,216,120
271,125
255,538
145,535
312,391
114,550
440,096
13,730,849
—
—
—
—
—
—
118,169
$ 271,125 $
255,538 $
145,535 $
312,391 $
114,550 $
440,096 $
13,849,018
169
State of California Comprehensive Annual Financial Report
Combining Statement of Net Position
Internal Service Funds
June 30,2014
(amounts in thousands)
LIABILITIES
Current liabilities:
Accounts payable.
Due to other funds.
Due to other governments.
Revenues received in advance.
Deposits.
Contracts and notes payable.
Interest payable.
Current portion of long-term obligations.
Other liabilities.
Total current liabilities.
Noncurrent liabilities:
Interfund payables.
Compensated absences payable.
Workers’ compensation benefits payable.
Revenue bonds payable.
Net other postemployment benefits obligation
Other noncurrent liabilities.
Total noncurrent liabilities.
Total liabilities.
NET POSITION
Net investment in capital assets.
Restricted - expendable:
Construction.
Debt service.
Total expendable.
Unrestricted.
Total net position (deficits).
Total liabilites and net position.
Public
Buildings Arcbitecture
Construction Revolving
$
168,622 $
18,259
10,534
429
194
—
5,787
285,376
118,944
—
500,790
—
93,239
1,615
898,110
305,679
—
8,405
—
1,007
10,822,897
—
—
12,944
10,822,897
22,356
11,721,007
328,035
282,605
—
4,796
—
287,401
—
—
(26,660)
287,401
(26,660)
$ 12,008,408 $
301,375
170
Internal Service Funds
Service
Prison
Financial
Information
Technology
Services
Water
Resources
Other
Internal
Service
Revolving
Industries
Systems
Revolving
Revolving
Programs
Total
$
42,171 $
8,193 $
39,714 $
118,341 $
19,497 $
88,400
$ 503,197
56,710
7,399
4,426
—
—
21,139
100,637
162
—
—
458
4
61
879
22,918
895
—
—
46
—
315,022
429
—
—
—
—
—
429
615
—
—
14,587
—
—
15,202
—
—
—
—
—
—
118,944
—
3,197
856
—
—
—
504,843
4,854
2,031
—
—
486
3,337
105,562
127,859
21,715
44,996
133,386
20,033
112,937
1,664,715
3,826
37,650
1,750
95,208
172
138,606
64,388
9,577
1,970
30,259
50,699
1,425
166,723
20,763
14,485
—
6,782
—
—
43,037
—
—
—
—
—
—
10,822,897
226,449
46,808
—
72,051
—
86,060
444,312
—
—
—
21,329
—
—
21,329
315,426
70,870
39,620
132,171
145,907
87,657
11,636,904
443,285
92,585
84,616
265,557
165,940
200,594
13,301,619
31,911
45,137
92,162
69,743
—
6,486
245,439
—
—
—
—
—
—
282,605
4,796
—
—
—
—
—
—
287,401
(204,071)
117,816
(31,243)
(22,909)
(51,390)
233,016
14,559
(172,160)
162,953
60,919
46,834
(51,390)
239,502
547,399
$
271,125 $
255,538 $
145,535 $
312,391 $
114,550 $
440,096
$ 13,849,018
171
State of California Comprehensive Annual Financial Report
Combining Statement of Revenues,
Expenses, and Changes in Fund Net Position
Internal Service Funds
Year Ended June 30, 2014
(amounts in thousands)
OPERATING REVENUES
Services and sales.
Investment and interest.
Rent.
Other.
Total operating revenues.
OPERATING EXPENSES
Personal services.
Supplies.
Services and charges.
Depreciation.
Interest expense.
Amortization of long-term prepaid charges.
Other.
Total operating expenses.
Operating income (loss).
NONOPERATING REVENUES (EXPENSES)
Investment and interest income.
Interest expense and fiscal charges.
Loss on early extinguishment of debt.
Other.
Total nonoperating revenues (expenses).
Income (loss) before transfers.
Transfers in.
Transfers out.
Change in net position.
Total net position (deficit) - beginning.
Totai net position (deficit) - ending.
* Restated
Public
Buildings
Arcbitecture
Construction
Revolving
$ —
$ 177,428
8,173
—
418,574
—
5,143
—
431,890
177,428
—
28,832
14,403
148,931
439,888
—
1,496
—
9,393
—
465,180
177,763
(33,290)
(335)
(54,537)
—
(54,537)
—
(87,827)
(335)
6,649
—
(81,178)
(335)
368,579 *
(26,325)
$ 287,401
$ (26,660)
* The Financial Information Systems Fund was included in the Other Internal Service Programs column in the prior fiscal year and the Office of
Systems Integration Fund that was reported in its own colunm in the prior fiscal year is now included in the Other Internal Service Programs
column.
172
Internal Service Funds
Other
Financial
Technology
Water
Internal
Service
Prison
Information
Services
Resources
Service
Revolving
Industries
Systems
Revolving
Revolving
Programs
Total
$ 770,972
$ 220,322
$ 84,663
$ 554,828
$ 395,536
$ 339,344 $
2,543,093
8,173
418,574
5,143
—
—
—
—
—
—
770,972
220,322
84,663
554,828
395,536
339,344
2,974,983
245,860
62,867
396
163,715
382,909
29,327
913,906
—
3,525
—
—
4,988
1,308
9,821
505,474
159,845
40,973
464,749
—
253,337
1,587,712
9,591
6,135
302
30,275
1,349
251
47,903
—
—
—
412
—
—
440,300
1,496
9,393
760,925
232,372
41,671
659,151
389,246
284,223
3,010,531
10,047
(12,050)
42,992
(104,323)
6,290
55,121
(35,548)
168
112
295
575
—
(3)
—
—
—
—
(3)
—
—
—
—
—
—
(54,537)
—
(485)
—
(1,070)
—
—
(1,555)
—
(320)
—
(958)
—
295
(55,520)
10,047
(12,370)
42,992
(105,281)
6,290
55,416
(91,068)
—
—
3,394
63,614
—
3,000
76,657
(38,676)
—
—
—
—
(71,194)
(109,870)
(28,629)
(12,370)
46,386
(41,667)
6,290
(12,778)
(124,281)
(143,531)
175,323
14,533
* 88,501
(57,680)
252,280 ‘
671,680
$ (172,160)
$ 162,953
$ 60,919
$ 46,834
$ (51,390)
$ 239,502 $
547,399
173
State of California Comprehensive Annual Financial Report
Combining Statement of Cash Fiows
Internal Service Funds
Year Ended June 30, 2014
(amounts in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers.
Receipts from interfund services provided.
Payments to suppliers.
Payments to employees.
Payments for interfund services used.
Other receipts (payments).
Net cash provided by (used in) operating activities.
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Changes in interfund payables and loans payable.
Interest paid on operating debt.
Transfers in.
Transfers out.
Net cash provided by (used in) noncapital financing activities.
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Acquisition of capital assets.
Proceeds from sale of capital assets.
Proceeds from revenue bonds.
Retirement of revenue bonds.
Net cash used in capitai and reiated financing activities.
CASH FLOWS FROM INVESTING ACTIVITIES
Earnings on investments.
Net cash provided by (used in) investing activities.
Net increase (decrease) in cash and pooled investments.
Cash and pooled investments - beginning.
Cash and pooled investments - ending..
Public
Buildings Architecture
Construction Revolving
$
764,575 $
184,493
—
10,342
(879)
(148,737)
—
(27,931)
(450,930)
11
312,766
18,178
6,649
—
6,649
_
(1,217,406)
—
2,323,173
—
(412,085)
—
693,682
—
—
—
1,013,097
18,178
2,728,900
256,790
$ 3,741,997 $
274,968
174
Internal Service Funds
Service
Revolving
Prison
Industries
Financial
Information
Systems
Technology
Services
Revolving
Water
Resources
Revolving
Other
Internal
Service
Programs
Total
$ 782,741
$ 220,589
$ 86,769
$ 551,645
$ 397,849
$ 339,531 $
3,328,192
—
6,407
16,145
2,834
90
95,995
131,813
(498,158)
(154,781)
(28,808)
(404,713)
(3,135)
(324,301)
(1,563,512)
(217,607)
(54,123)
—
(138,615)
(389,192)
(15,533)
(843,001)
(30,613)
(10,340)
—
(47,330)
—
(5,212)
(93,495)
(5,356)
(139)
—
9,216
(1,175)
(3,131)
(451,504)
31,007
7,613
74,106
(26,963)
4,437
87,349
508,493
(556)
(112)
(7)
1,242
567
—
(3)
—
(412)
—
—
(415)
—
—
3,394
63,614
—
3,000
76,657
(38,676)
—
—
—
—
(71,194)
(109,870)
(39,232)
(3)
3,394
63,090
(7)
(66,952)
(33,061)
(21,159)
(9,220)
(41,058)
(48,273)
(1,348)
(29)
(1,338,493)
167
586
—
17,805
—
—
18,558
—
—
—
—
—
—
2,323,173
—
—
—
—
—
—
(412,085)
(20,992)
(8,634)
(41,058)
(30,468)
(1,348)
(29)
591,153
169
112
295
576
—
169
—
112
—
295
576
(29,217)
(855)
36,442
5,771
3,082
20,663
1,067,161
112,102
169,364
7,576
42,202
10,971
342,006
3,669,911
$ 82,885
$ 168,509
$ 44,018
$ 47,973
$ 14,053
$ 362,669 $
4,737,072
(continued)
175
State of California Comprehensive Annual Financial Report
Combining Statement of Cash Fiows (continued)
Internal Service Funds
Year Ended June 30, 2014
(amounts in thousands)
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES
Operating income (loss).
Adjustments to reconcile operating income (loss) to net cash
provided by operating activities:
Interest expense on operating debt.
Depreciation.
Amortization of premiums and discounts.
Amortization of long-term prepaid charges.
Other.
Change in assets, deferred outflows of resources,
and liabilities, deferred inflows of resources:
Receivables.
Due from other funds.
Due from other governments.
Prepaid items.
Inventories.
Net investment in direct financing leases.
Accounts payable.
Due to other funds.
Due to component units.
Due to other governments.
Deposits.
Contracts and notes payable.
Interest payable.
Revenues received in advance.
Other current liabilities.
Benefits payables.
Compensated absences payable.
Other noncurrent liabilities.
Total adjustments.
Net cash provided by (used in) operating activities.
Public
Buildings
Architecture
Construction
Revolving
$
(33,290) $
(335)
(44,113)
—
18,058
—
21,738
—
—
54
(43,651)
10,865
—
(1,979)
8,094
—
389,895
—
(312)
2,173
557
(523)
(837)
—
(3,370)
—
(3)
7,011
—
(42)
—
1,792
—
(838)
346,056
18,513
$
312,766 $
18,178
Noncash investing, capital, and financing activities
Debt restructure and termination of direct financing leases. $ 114,285 $
176
Internal Service Funds
Service
Revolving
Prison
Industries
Financial
Information
Systems
Technology
Services
Revolving
Water
Resources
Revolving
Other
Internal
Service
Programs
Total
$ 10,047
$ (12,050)
$ 42,992
$ (104,323)
$ 6,290
$ 55,121 $
(35,548)
—
—
—
412
—
—
412
9,591
6,135
302
30,275
1,349
251
47,903
—
—
—
—
—
—
(44,113)
—
—
—
—
—
—
18,058
—
(13,140)
—
—
—
—
8,598
10,644
(873)
—
(3,183)
2,348
187
9,177
(2,195)
2,332
2,106
(222,565)
95
324,097
71,084
(12,712)
(103)
18,390
(268)
—
5
5,312
(9,801)
(101)
(4,128)
(94)
401
1,016
(14,686)
1,061
3,004
—
3,931
214
—
16,304
—
—
—
—
—
—
389,895
934
(2,994)
16,293
56,199
1,238
(70,736)
2,795
(13,296)
17,250
(2,245)
178,069
(5)
(238,851)
(59,044)
—
—
—
(1,191)
—
(31)
(2,059)
162
—
—
451
(28)
—
585
(47)
—
—
—
—
—
(47)
593
—
—
3,894
—
—
4,487
—
—
—
—
—
—
(3,370)
1,125
(1,090)
—
—
(35)
—
7,008
4,835
1,437
(691)
(4,277)
(1,147)
(1,421)
(1,306)
37,507
—
—
22,967
—
2,705
64,971
(7,441)
(695)
1,087
8,915
(6,283)
(338)
(5,593)
—
8,501
—
3,825
—
15,344
27,670
20,960
19,663
31,114
77,360
(1,853)
32,228
544,041
$
31,007 $
7,613 $
74,106 $
(26,963) $
4,437 $
87,349 $
508,493
(concluded)
$
— $
— $
— $
— $
— $
— $
114,285
111
State of California Comprehensive Annual Financial Report
This page intentionally left blank
178
Nonmajor Enterprise Funds
Enterprise funds account for operations that are financed and operated in a ma nn er similar to private
business enterprises, in which the costs of providing goods or services to the general public on a
continuing basis are intended to be financed or recovered primarily through user charges. Following
are brief descriptions of nonmajor enterprise funds.
The High Technology Education Fund accounts for construction and renovation of public
buildings for educational and research purposes related to specific fields of high technology.
During the fiscal year, all outstanding revenue bonds were defeased and the related lease receivable
was terminated. The fund’s remaining assets were transferred to an escrow account with the State
Treasurer and the fund was dissolved.
The State Water Pollution Control Revolving Fund accounts for loans to finance the
construction of publicly owned water pollution control facilities.
The Housing Loan Fund accounts for financing and contracts for the sale of properties to eligible
California veterans.
Other enterprise program funds account for all other goods or services provided to the general
public on a continuing basis when all or most of the cost involved is to be financed by user
charges, or when periodic measurement of the results of operations is appropriate for management
control, accountability, capital maintenance, public policy, or other purposes.
179
State of California Comprehensive Annual Financial Report
Combining Statement of Net Position
Nonmajor Enterprise Funds
June 30,2014
(amounts in thousands)
High State Water
Technology Pollution Control
Education Revolving
ASSETS
Current assets:
Cash and pooled investments. $ — $ 309,447
Restricted assets:
Cash and pooled investments. — 25,975
Due from other governments. — 20,182
Receivables (net). — —
Due from other funds. — 382
Due from other governments. — 205,886
Prepaid items. — —
Inventories. — —
Total current assets. — 561,872
Noncurrent assets:
Restricted assets:
Loans receivable. — 305,278
Investments. — —
Interfund receivables. — 4,000
Loans receivable. — 2,853,583
Capital assets:
Land.
Buildings and other depreciable property.
Intangible assets - amortizable.
Less: accumulated depreciation/amortization
Intangible assets - non-amortizable.
Other noncurrent assets.
Total noncurrent assets.
3,162,861
Total assets.
. $
— $
3,724,733
180
Nonmajor Enterprise Funds
Other
Housing
Enterprise
Loan
Programs
Total
$
101,681 $
252,288 $
663,416
—
—
25,975
—
—
20,182
32,096
225
32,321
63
227
672
—
612
206,498
—
27
27
—
3,124
3,124
133,840
256,503
952,215
—
—
305,278
25,202
—
25,202
—
1,600
5,600
801,845
120,159
3,775,587
443
829
1,272
16,260
1,878
18,138
—
1,500
1,500
(15,827)
(1,486)
(17,313)
—
222
222
5,586
—
5,586
833,509
124,702
4,121,072
$ 967,349 $
381,205 $
5,073,287
(continued)
181
State of California Comprehensive Annual Financial Report
Combining Statement of Net Position (continued)
Nonmajor Enterprise Funds
June 30,2014
(amounts in thousands)
High State Water
Technology Pollution Control
Education Revolving
LIABILITIES
Current liabilities:
Accounts payable.
. $
— $
Due to other funds.
162
Due to other governments.
Revenues received in advance.
—
7
Interest payable.
469
Current portion of long-term obligations.
14,339
Other current liabilities.
Total current liabilities.
—
14,977
Noncurrent liabilities:
Compensated absences payable.
—
—
General obligation bonds payable.
—
—
Revenue bonds payable.
—
44,897
Net other postemployment benefits obligation.
—
—
Other noncurrent liabilities.
_
_
Total noncurrent liabilities.
44,897
Total liabilities .
—
59,874
NET POSITION
Net investment in capital assets.
—
—
Restricted - expendable:
Debt service.
—
25,975
Security for revenue bonds.
—
325,460
Other purposes.
—
—
Total expendable.
—
351,435
Unrestricted.
—
3,313,424
Total net position .
—
3,664,859
Total liabilities and net position .
. $
— $
3,724,733
182
Nonmajor Enterprise Funds
Other
Housing Enterprise
Loan _ Programs _ Total
$
$
2,637
$
2,637
198
1,192
1,552
—
7
7
—
25
32
10,975
—
11,444
—
11,917
26,256
—
126
126
11,173
15,904
42,054
2,739
2,739
432,357
—
432,357
370,750
—
415,647
1,538
6,867
8,405
623
73,086
73,709
805,268
82,692
932,857
816,441
98,596
974,911
876
2,948
3,824
—
—
25,975
—
—
325,460
150,032
204,383
354,415
150,032
204,383
705,850
—
75,278
3,388,702
150,908
282,609
4 , 098,376
$
967,349
$
381,205
$
5 , 073,287
(concluded)
183
State of California Comprehensive Annual Financial Report
Combining Statement of Revenues,
Expenses, and Changes in Fund Net Position
Nonmajor Enterprise Funds
Year Ended June 30, 2014
(amounts in thousands)
OPERATING REVENUES
Services and sales.
Investment and interest.
Rent.
Other.
Total operating revenues.
OPERATING EXPENSES
Personal services.
Services and charges.
Depreciation.
Interest expense.
Other.
Total operating expenses.
Operating income (loss).
NONOPERATING REVENUES (EXPENSES)
Investment and interest income.
Interest expense and fiscal charges.
Loss on early extinguishment of debt.
Other.
Total nonoperating revenues (expenses).
Income (loss) before capital contributions and transfers
Capital contributions.
Transfers out.
Change in net position.
Total net position - beginning.
Total net position - ending.
High State Water
Technology Pollution Control
Education Revolving
$
— $
8,018
27
54,112
397
—
424
62,130
816
—
2,969
847
—
—
923
847
4,708
( 423 )
57,422
855
—
( 355 )
( 26 , 913 )
—
—
( 9 )
( 26 , 913 )
491
( 27 , 336 )
57,913
—
80,903
( 6 , 649 )
—
( 33 , 985 )
138,816
33,985
3 , 526,043
$
— $
3 , 664,859
184
Nonmajor Enterprise Funds
Other
Housing
Enterprise
Loan
Programs
Total
$ 1,220
$ 74,286 $
83,524
62,442
96
116,677
—
647
1,044
1,585
2,222
3,807
65,247
77,251
205,052
8,431
5,714
14,961
10,453
73,581
87,003
115
346
461
37,639
—
38,486
568
—
1,491
57,206
79,641
142,402
8,041
( 2 , 390 )
62,650
420
1,275
—
—
( 355 )
—
—
( 26 , 913 )
—
—
( 9 )
—
420
(26,002)
8,041
( 1 , 970 )
36,648
—
—
80,903
—
( 199 )
( 6 , 848 )
8,041
( 2 , 169 )
110,703
142,867
284,778
3,987,673
$ 150,908
$ 282,609 $
4,098,376
185
State of California Comprehensive Annual Financial Report
Combining Statement of Cash Flows
Nonmajor Enterprise Funds
Year Ended June 30, 2014
(amounts in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers/employers.
Receipts from interfund services provided.
Payments to suppliers.
Payments to employees.
Payments for interfund services used.
Other receipts (payments).
Net cash provided by (used in) operating activities.
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Retirement of general obligation bonds.
Retirement of revenue bonds.
Interest paid on operating debt.
Transfers out.
Net cash provided by (used in) noncapitai financing activities.
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Acquisition of capital assets.
Grants received.
Net cash provided by (used in) capitai and reiated financing activities.
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments.
Earnings (loss) on investments.
Net cash provided by (used in) investing activities.
Net increase (decrease) in cash and pooled investments.
Cash and pooled investments - beginning.
Cash and pooled investments - ending..
High
Technology
Education
State Water
Pollution Control
Revolving
$ —
$ 51,417
—
( 3 , 891 )
—
( 816 )
—
( 60 )
11,006
( 169 , 328 )
11,006
(122,678)
( 24 , 771 )
( 13 , 000 )
—
( 2 , 080 )
( 6 , 649 )
—
(31,420)
(15,080)
—
82,351
—
82,351
—
890
—
890
( 20 , 414 )
20,414
( 54 , 517 )
389,939
$
— $
335,422
186
Nonmajor Enterprise Funds
Other
Housing
Enterprise
Loan
Programs
Total
$ 239,470 $
76,648 $
367,535
—
419
419
(6,869)
(74,778)
(85,538)
(8,431)
(4,286)
(13,533)
—
(890)
(950)
(112,274)
10,498
(260,098)
111,896
7,611
7,835
(151,715)
(151,715)
(47,620)
—
(85,391)
—
—
(2,080)
—
(199)
(6,848)
(199,335)
(199)
(246,034)
(128)
(302)
(430)
—
—
82,351
(128)
(302)
81,921
(2,500)
(2,500)
—
420
1,310
(2,500)
420
(1,190)
(90,067)
7,530
(157,468)
191,748
244,758
846,859
$ 101,681 $
252,288 $
689,391
(continued)
187
State of California Comprehensive Annual Financial Report
Combining Statement of Cash Flows (continued)
Nonmajor Enterprise Funds
Year Ended June 30, 2014
(amounts in thousands)
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES
Operating income (loss).
Adjustments to reconcile operating income (loss) to net cash
provided by operating activities:
Depreciation.
Provisions and allowances.
Amortization of premiums and discounts.
Amortization of long-term prepaid charges.
Other.
Change in assets, deferred outflows of resources,
and liabilities, deferred inflows of resources:
Receivables.
Due from other funds.
Due from other governments.
Prepaid items.
Inventories.
Net investment in direct financing leases.
Other current assets.
Loans receivable.
Accounts payable.
Due to other funds.
Due to other governments.
Interest payable.
Revenues received in advance.
Other current liabilities.
Benefits payables.
Compensated absences payable.
Other noncurrent liabilities.
Total adjustments.
Net cash provided by (used in) operating activities.
High State Water
Technoiogy Poiiution Controi
Education Revoiving
$
(423) $
57,422
4
—
948
—
1,797
(10,846)
298
20
(3)
—
715
8,468
—
—
(169,911)
—
(58)
(106)
—
—
3
11,429
(180,100)
$
11,006 $
(122,678)
Debt restructure and termination of direct financing leases
$
22,006 $
188
Nonmajor Enterprise Funds
Other
Housing
Enterprise
Loan
Programs
Total
$ 8,041
$ (2,390) $
62,650
115
346
461
(3,586)
—
(3,586)
501
—
505
—
—
948
569
—
(8,480)
1,856
54
2,208
(14)
8
11
64
671
1,450
—
(26)
(26)
—
(425)
(425)
—
—
8,468
98
—
98
105,200
882
(63,829)
—
(1,662)
(1,662)
27
(935)
(966)
—
4
4
—
—
(106)
—
(11)
(11)
(1,199)
11,940
10,744
(26)
106
80
—
24
24
250
(975)
(725)
103,855
10,001
(54,815)
$
111,896 $
7,611 $
7,835
(concluded)
$
— $
— $
22,006
189
State of California Comprehensive Annual Financial Report
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190
Private Purpose Trust Funds
Private purpose trust funds account for all trust arrangements, other than those properly reported in
pension and other employee benefit trust funds or investment trust funds, under which both principal
and income benefit individuals, private organizations, or other governments. Following are brief
descriptions of private purpose trust funds.
The Scholarshare Program Trust Fund accounts for money received from participants to fund
their beneficiaries’ higher-education expenses at certain postsecondary educational institutions.
The Unclaimed Property Fund accounts for unclaimed money and properties held in trust by the
State.
Other private purpose trust funds account for other assets held in a trustee capacity when both
principal and income benefit individuals, private organizations, or other governments.
191
State of California Comprehensive Annual Financial Report
Combining Statement of Fiduciary Net Position
Private Purpose Trust Funds
June 30,2014
(amounts in thousands)
Scboiarsbare
Program
Trust
Unclaimed
Property
Other Private
Purpose
Trust
Total
ASSETS
Cash and pooled investments.
.... $
6
$
32,457
$
17,433
$
49,896
Investments, at fair value:
Equity securities.
3,218,383
—
—
3,218,383
Debt securities.
1,844,304
—
—
1,844,304
Real estate.
188,273
—
—
188,273
Other.
777,884
—
—
777,884
Total investments.
6,028,844
—
—
6,028,844
Receivables (net).
8,482
17
—
8,499
Due from other funds.
—
85,919
10
85,929
Other assets.
—
172,661
—
172,661
Total assets.
6,037,332
291,054
17,443
6,345,829
LIABILITIES
Accounts payable.
9,008
6,991
15,336
31,335
Deposits.
—
172,661
—
172,661
Other liabilities.
_
_
938
938
Total liabilities.
9,008
179,652
16,274
204,934
NET POSITION
Heid in trust for benefits and other purposes.
$
6,028,324
$
111,402
$
1,169
$
6,140,895
192
Private Purpose Trust Funds
Combining Statement of Changes in Fiduciary Net Position
Private Purpose Trust Funds
Year Ended June 30, 2014
(amounts in thousands)
Scholarshare
Program
Trust
Unclaimed
Property
Other Private
Purpose
Trust
Total
ADDITIONS
Investment income:
Net appreciation in fair value of investments.
. $
512,830
$
—
$
—
$
512,830
Interest, dividends, and other investment income ....
244,806
—
—
244,806
Less: investment expense.
(4,023)
_
_
(4,023)
Net investment income.
753,613
—
—
753,613
Receipts from depositors.
2,753,223
290,820
15,712
3,059,755
Total additions..
3,506,836
290,820
15,712
3,813,368
DEDUCTIONS
Administrative expenses.
—
—
3
3
Payments to and for depositors.
2,534,290
277,365
15,471
2,827,126
Total deductions.
2,534,290
277,365
15,474
2,827,129
Change in net position.
972,546
13,455
238
986,239
Net position - beginning.
5,055,778
97,947
931
5,154,656
Net position - ending.
.. $
6,028,324
$
111,402
$
1,169
$
6,140,895
193
State of California Comprehensive Annual Financial Report
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194
Fiduciary Funds and Simiiar
Component Units - Pension and Other
Empioyee Benefit Trust Funds
Pension and other employee benefit trust funds account for transactions, assets, liabilities, and net
position available for pension and other employee benefits of the two public employees’ retirement
systems that are fiduciary component units and for other primary government employee benefit
programs. Following are brief descriptions of pension and other employee benefit trust funds.
Defined Benefit Pension Plans are pension plans that are used to provide defined benefit pensions to
employees after separation from service:
The Public Employees’ Retirement Fund is administered by the California Public Employees’
Retirement System (CalPERS) and accounts for the employee and employer contributions of the
agent multiple-employer retirement plan that provides pension benefits to employees of the State
of California, non-teaching school employees, and employees of California public agencies.
The State Teachers’ Retirement Fund is administered by the California State Teachers’
Retirement System (CalSTRS) and accounts for the employee, employer, and primary government
contributions of the cost-sharing multiple-employer retirement plan that provides pension benefits
to teachers and certain other employees of the California public school system.
The Judges’ Retirement Fund is administered by CalPERS and accounts for the employee and
employer contributions of the single-employer retirement plan that provides pension benefits to
judges of the California Supreme Court, courts of appeal, and superior courts who were appointed
or elected prior to November 9, 1994.
The Judges’ Retirement Fund II is administered by CalPERS and accounts for the employee and
employer contributions of the single-employer retirement plan that provides pension benefits to
judges of the California Supreme Court, courts of appeal, and superior courts who were appointed
or elected on or subsequent to November 9, 1994.
The Legislators’ Retirement Fund is administered by CalPERS and accounts for the employee
and employer contributions of the single-employer retirement plan that provides pension benefits
to members of the Eegislature serving prior to November 7, 1990, constitutional officers, and
legislative statutory officers who elect to participate in the plan.
(continued)
195
State of California Comprehensive Annual Financial Report
(continued)
The Deferred Compensation Fund accounts for monies withheld from the salaries of participants per
Internal Revenue Code sections 401(k), 457, and 403(b). The monies are invested until the employee
retires or resigns, at which time all money withdrawn, including investment income, is subject to
income taxes.
Other pension and other employee benefit trust funds account for funds contributed to smaller
retirement plans and programs that are not defined benefit pension plans: Annuitants’ Health Care
Coverage Fund, Teachers’ Health Benefits Fund, State Peace Officers’ and Firefighters’ Defined
Contribution Plan Fund, Supplemental Contributions Program Fund, Boxers’ Pension Fund, and
Flexelect Benefit Fund.
196
Pension and Other Employee Benefit Trust Funds
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197
State of California Comprehensive Annual Financial Report
Combining Statement of Fiduciary Net Position
Fiduciary Funds and Similar Component Units - Pension
and Other Employee Benefit Trust Funds
June 30,2014
(amounts in thousands)
Defined Benefit
ASSETS
Investments, at fair value:
Short-term.
Equity securities.
Debt securities.
Real estate.
Other.
Securities lending collateral.
Total investments.
Receivables (net).
Due from other funds.
Due from other governments.
Loans receivable.
Other assets.
Total assets.
LIABILITIES
Accounts payable.
Benefits payable.
Securities lending obligations.
Loans payable.
Other liabilities.
Total liabilities.
NET POSITION
Restricted for pension benefits, pooi participants, and other empioyee benefits ...
Pubiic
State
Empioyees’
Teachers’
Retirement
Retirement
$ 2,149,212
$ 457,219
8,232,423
4,371,070
158,161,501
102,089,007
72,465,033
31,972,479
29,580,354
23,673,246
31,512,577
29,614,996
17,249,281
22,303,191
317,201,169
214,023,989
1,775,492
3,102,990
500,614
66,894
—
18,491
—
21,620
701,798
229,079
322,328,285
217,920,282
16,203
2,944,928
1,505,516
1,120,499
17,089,383
22,311,298
—
944,269
1,955,644
125,272
20,566,746
27,446,266
$ 301,761,539
$ 190,474,016
198
Pension and Other Employee Benefit Trust Funds
Other
Pension Plans _ Pension
and Other
Judges’
Judges’
Legislators’
Deferred
Employee
Retirement
Retirement II
Retirement
Compensation
Benefit Trust
Total
$
3,933
$
2,963
$
1,233
$
16,439
$
56,934
$
2,687,933
51,155
5
4
237,585
118,296
13,010,538
—
739,691
55,582
6,722,789
3,089,827
270,858,397
—
260,112
73,735
3,606,373
1,105,488
109,483,220
—
—
—
—
—
53,253,600
—
—
—
1,751,529
—
62,879,102
—
78,033
8,581
—
60,551
39,699,637
51,155
1,077,841
137,902
12,318,276
4,374,162
549,184,494
2,886
10,979
596
16,464
107,328
5,016,735
13
4
—
10
17
567,552
—
—
—
10
—
18,501
—
—
—
385
—
22,005
—
—
—
—
—
930,877
57,987
1,091,787
139,731
12,351,584
4,538,441
558,428,097
147
1,883
3,141
2,966,302
10
—
649
421
28,210
2,655,305
—
77,478
8,520
—
60,120
39,546,799
—
—
—
—
—
944,269
778
323
208
3,884
4,509
2,090,618
788
77,948
9,377
6,188
95,980
48,203,293
$
57,199
$
1,013,839
$
130,354
$
12,345,396
$
4,442,461
$
510,224,804
199
State of California Comprehensive Annual Financial Report
Combining Statement of Changes
in Fiduciary Net Position
Fiduciary Funds and Similar Component Units - Pension
and Other Employee Benefit Trust Funds
Year Ended June 30, 2014
(amounts in thousands)
Defined Benefit
Public
State
Employees’
Teachers’
Retirement
Retirement
ADDITIONS
Contributions:
Employer.
. $
8,777,602
$
3,655,634
Plan member.
3,775,038
2,263,613
Total contributions.
12,552,640
5,919,247
Investment income:
Net appreciation (depreciation) in fair value of investments.
44,413,007
26,092,999
Interest, dividends, and other investment income.
2,641,267
4,613,173
Less: investment expense.
(1,463,801)
(304,269)
Net investment income.
45,590,473
30,401,903
Other.
7,571
2,055
Total additions.
58,150,684
36,323,205
DEDUCTIONS
Distributions to beneficiaries.
17,760,584
11,927,565
Refunds of contributions.
236,968
107,600
Administrative expense.
381,497
162,933
Interest expense.
—
—
Payments to and for depositors.
—
—
Total deductions.
18,379,049
12,198,098
Change in net position.
39,771,635
24,125,107
Net position - beginning.
261,989,904
166,348,909
Net position - ending.
. $
301,761,539
$
190,474,016
' Judges’ Retirement, Judges’ Retirement II, and Legislators’ Retirement funds were included in the Other Pension and Other Employee Benefit
Trust funds column in the prior year.
200
Pension and Other Employee Benefit Trust Funds
Pension Plans
Jndges’
Retirement
$
191,148
4,724
195,872
59
(5)
54
2,529
198,455
193,925
10
1,141
195,076
3,379
53,820
$
57,199
Jndges’
Retirement II
$
57,027
20,413
77,440
149,975
629
(436)
150,168
227,608
8,865
85
785
9,735
217,873
795,966
$
1,013,839
Legislators’
Retirement
$
565
113
678
15,379
51
(58)
15,372
16,050
7,482
362
7,844
8,206
122,148
$
130,354
Deferred
Compensation
$
900
863,633
864,533
221,370
1,325,402
(802)
1,545,970
12,482
2,422,985
22,531
99,956
12,948
580,203
715,638
1,707,347
10,638,049
$
12,345,396
Other
Pension
and Other
Employee
Benefit Trnst
$
1,714,491
31,457
1,745,948
587,615
427
(1,761)
586,281
7,815
2,340,044
1,085,134
5,546
38,598
1,129,278
1,210,766
3,231,695
$
4,442,461
Total
$ 14,397,367
_6,958,991
21,356,358
71,480,345
8,581,008
(1,771,132)
78,290,221
32,452
99,679,031
31,006,086
444,619
565,212
618,801
32,634,718
67,044,313
443,180,491
$ 510,224,804
201
State of California Comprehensive Annual Financial Report
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202
Agency Funds
Agency funds account for the receipt and disbursement of various taxes, deposits, deductions, and
property collected by the State, acting in the capacity of an agent, for distribution to other
governmental units or other organizations. Following are brief descriptions of agency funds.
The Receipting and Disbursing Fund accounts for the collection and disbursement of revenues
and receipts on behalf of local governments. This fund also accounts for receipts from many state
funds, typically for the purpose of writing a single warrant when the warrant is funded by multiple
funding sources.
The Deposit Fund accounts for various deposits, such as those from condemnation and litigation
proceedings.
Other agency activity funds account for other assets held by the State, which acts as an agent for
individuals, private organizations, and other governments.
203
State of California Comprehensive Annual Financial Report
Combining Statement of Fiduciary
Assets and Liabiiities
Agency Funds
June 30,2014
(amounts in thousands)
Receipting
and
Disbursing
Deposit
Other
Agency
Activities
Total
ASSETS
Cash and pooled investments.
. $ 2,190,374
$
1,467,960
$
23,893
$
3,682,227
Receivables (net).
. 2,019,572
108,472
1,518
2,129,562
Due from other funds.
. 20,690,185
2,755
769
20,693,709
Due from other governments.
. 7,652
10
—
7,662
Prepaid items.
. 28,734
194
—
28,928
Loans receivable.
. —
—
7,257
7,257
Other assets.
. 55
38
—
93
Total assets.
. $ 24,936,572
$
1,579,429
$
33,437
$
26,549,438
LIABILITIES
Accounts payable.
. $ 14,886,495
$
52,793
$
3,081
$
14,942,369
Due to other governments.
. 9,974,859
2,329
7,045
9,984,233
Tax overpayments.
. 4,632
—
—
4,632
Revenues received in advance.
. 21,053
1,072
—
22,125
Deposits.
. 39,160
940,470
7,973
987,603
Other liabilities.
. 10,373
582,765
15,338
608,476
Total liabilities.
. $ 24,936,572
$
1,579,429
$
33,437
$
26,549,438
204
Agency Funds
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205
State of California Comprehensive Annual Financial Report
Combining Statement of Changes
in Fiduciary Assets and Liabiiities
Agency Funds
Year Ended June 30, 2014
(amounts in thousands)
Receipting and Disbursing Fund
Balance
July 1, 2013
Additions
Deductions
Balance
June 30, 2014
ASSETS
Cash and pooled investments.
. $
2,369,714
$
154,687,200
$
154,866,540
$
2,190,374
Receivables (net).
1,377,732
3,490,419
2,848,579
2,019,572
Due from other funds.
18,212,542
22,905,077
20,427,434
20,690,185
Due from other governments.
20,763
583
13,694
7,652
Prepaid items.
11,867
28,734
11,867
28,734
Other assets.
55
—
—
55
Total assets..
. $
21,992,673
$
181,112,013
$
178,168,114
$
24,936,572
LIABILITIES
Accounts payable.
. $
10,013,095
$
45,988,721
$
41,115,321
$
14,886,495
Due to other governments.
11,685,759
29,189,519
30,900,419
9,974,859
Tax overpayments.
684
76,390
72,442
4,632
Benefits payable.
220,767
—
220,767
—
Revenues received in advance.
17,688
3,393
28
21,053
Deposits.
40,547
—
1,387
39,160
Other liabilities.
14,133
_
3,760
10,373
Total liabilities.
. $
21,992,673
$
75,258,023
$
72,314,124
$
24,936,572
Deposit Fund
Balance
July 1, 2013
Additions
Deductions
Balance
June 30, 2014
ASSETS
Cash and pooled investments.
. $
1,569,454
$
18,576,666
$
18,678,160
$
1,467,960
Receivables (net).
98,485
219,384
209,397
108,472
Due from other funds.
57,832
318
55,395
2,755
Due from other governments.
285
391
666
10
Prepaid items.
166
28
—
194
Other assets.
32
21
15
38
Total assets.
. $
1,726,254
$
18,796,808
$
18,943,633
$
1,579,429
LIABILITIES
Accounts payable.
. $
69,213
$
568,579
$
584,999
$
52,793
Due to other governments.
1,910
3,496
3,077
2,329
Revenues received in advance.
813
14,211
13,952
1,072
Deposits.
943,471
633,530
636,531
940,470
Other liabilities.
710,847
17,977,336
18,105,418
582,765
Total liabilities.
. $
1,726,254
$
19,197,152
$
19,343,977
$
1,579,429
206
Agency Funds
Other Agency Activity Funds
Balance
July 1, 2013
Additions
Deductions
Balance
June 30, 2014
ASSETS
Cash and pooled investments .
. $
29,377
$
2,578
$
8,062
$
23,893
Receivables (net) .
1,514
4
—
1,518
Due from other funds .
690
79
—
769
Loans receivable .
7,153
104
—
7,257
Total assets.
. $
38,734
$
2,765
$
8,062
$
33,437
LIABILITIES
Accounts payable .
. $
2,619
$
462
$
—
$
3,081
Due to other governments .
14,666
2
7,623
7,045
Deposits .
5,500
2,473
—
7,973
Other liabilities .
15,949
_
611
15,338
Total liabilities.
. $
38,734
$
2,937
$
8,234
$
33,437
Total Agency Funds
Balance
July 1, 2013
Additions
Deductions
Balance
June 30, 2014
ASSETS
Cash and pooled investments.
. $ 3,968,545
$
173,266,444
$
173,552,762
$
3,682,227
Receivables (net).
. 1,477,731
3,709,807
3,057,976
2,129,562
Due from other funds.
. 18,271,064
22,905,474
20,482,829
20,693,709
Due from other governments.
. 21,048
974
14,360
7,662
Prepaid items.
. 12,033
28,762
11,867
28,928
Loans receivable.
. 7,153
104
—
7,257
Other assets.
. 87
21
15
93
Total assets .
. $ 23,757,661
$
199,911,586
$
197,119,809
$
26,549,438
LIABILITIES
Accounts payable.
. $ 10,084,927
$
46,557,762
$
41,700,320
$
14,942,369
Due to other governments.
. 11,702,335
29,193,017
30,911,119
9,984,233
Tax overpayments.
. 684
76,390
72,442
4,632
Benefits payable.
. 220,767
—
220,767
—
Revenues received in advance.
. 18,501
17,604
13,980
22,125
Deposits.
. 989,518
636,003
637,918
987,603
Other liabilities.
. 740,929
17,977,336
18,109,789
608,476
Total liabilities .
. $ 23,757,661
$
94,458,112
$
91,666,335
$
26,549,438
207
State of California Comprehensive Annual Financial Report
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208
Nonmajor Component Units
Nonmajor component units are legally separate entities that are diseretely presented in the State’s
financial statements in accordance with Generally Accepted Accounting Principles (GAAP). The
inclusion of component units in the State’s financial statements reflects the State’s financial
accountability or relationships with these organizations such that exclusion would cause the State’s
financial statements to be misleading. Following are brief descriptions of the nonmajor consolidated
component unit segments.
California State University Auxiliary organizations provide services primarily to university
students through foundations, associated student organizations, student unions, food service
entities, book stores, and similar organizations.
Financing authorities provide financing for transportation, business development and public
improvements, and coastal and inland urban waterfront restoration projects. These agencies
include: California Alternative Energy and Advanced Transportation Financing Authority,
California Infrastructure and Economic Development Bank, and the California Urban Waterfront
Area Restoration Financing Authority.
District agricultural associations were created to exhibit all of the industries, industrial
enterprises, resources, and products of the State. The financial information presented is as of and
for the year ended December 31,2013.
Other component units provide legal education programs, financial assistance to businesses, and
health benefits for state employees and annuitants. These entities include: University of California
Hastings College of the Eaw; State Assistance Fund for Enterprise, Business and Industrial
Development Corporation; and Public Employees’ Contingency Reserve.
209
State of California Comprehensive Annual Financial Report
Combining Statement of Net Position
Nonmajor Component Units
June 30,2014
(amounts in thousands)
ASSETS
Current assets:
Cash and pooled investments.
Investments.
Restricted assets:
Cash and pooled investments.
Investments.
Receivables (net).
Due from primary government.
Prepaid items.
Other current assets .
Total current assets.
Noncurrent assets:
Restricted assets:
Cash and pooled investments.
Investments.
Investments.
Receivables (net).
Loans receivable.
Capital assets:
Land.
Collections - nondepreciable.
Buildings and other depreciable property.
Intangible assets - amortizable.
Less: accumulated depreciation/amortization.
Construction in progress.
Intangible assets - non-amortizable.
Other noncurrent assets.
Total noncurrent assets.
Total assets.
DEFERRED OUTFLOWS OF RESOURCES.
Total assets and deferred outflows of resources
California
State
University
Financing Auxiliary
Authorities Organizations
$
32,309 $
405,558
399,561
124,554
8,941
17,667
390,597
—
31,919
183,471
1,227,635
—
26,725
9,586
—
—
1,771,674
—
237,243
278,257
—
—
111,745
—
8,401
1,700
1,159,412
841
10,686
(2,541)
(493,812)
—
9,891
—
5,082
—
42,245
287,843
2,889,292
471,314
4,116,927
865
5,204
$
472,179 $
4,122,131
210
Nonmajor Component Units
District Other
Agricultural
Component
Associations Units
Total
$ 81,769 $
429,521 $
949,157
4,839
—
404,400
1,058
2,905
128,517
6,988
—
15,929
4,549
34,619
447,432
—
1,212
1,212
647
95
742
430
—
32,349
100,280
468,352
1 , 979,738
—
—
26,725
4,700
—
14,286
—
69,360
1 , 841,034
—
15,387
252,630
—
7,197
285,454
22,232
5,089
139,066
—
—
8,401
694,056
139,959
1 , 995,127
—
1,051
12,578
( 422 , 693 )
( 53 , 656 )
( 972 , 702 )
9,323
143
19,357
—
—
5,082
—
8,506
50,751
307,618
193,036
3 , 677,789
407,898
661,388
5 , 657,527
—
—
6,069
$ 407,898 $
661,388 $
5 , 663,596
(continued)
211
State of California Comprehensive Annual Financial Report
Combining Statement of Net Position (continued)
Nonmajor Component Units
June 30,2014
(amounts in thousands)
LIABILITIES
Current liabilities:
Accounts payable.
Due to other governments.
Revenues received in advance.
Deposits.
Contracts and notes payable.
Interest payable.
Current portion of long-term obligations.
Other current liabilities.
Total current liabilities.
Noncurrent liabilities:
Compensated absences payable.
Workers’ compensation benefits payable.
Certificates of participation, commercial paper, and other borrowings .
Capital lease obligations.
Revenue bonds payable.
Net other postemployment benefits obligation.
Other noncurrent liabilities.
Total noncurrent liabilities.
Total liabilities.
DEFERRED INFLOWS OF RESOURCES.
Total liabilities and deferred inflows of resonrces.
NET POSITION
Net investment in capital assets.
Restricted:
Nonexpendable - endowments.
Expendable:
Endowments and gifts.
Education.
Statute .
Other purposes.
Total expendable.
Unrestricted.
Total net position.
Total liabilities, deferred inflows of resources, and net position
California
State
University
Financing Auxiliary
Authorities Organizations
$
29,196 $
81,173
—
62,110
—
7,110
2,251
—
5,014
241,249
5,987
88,307
42,448
479,949
162
3,471
—
20,255
—
360,020
141,508
47,717
1,300
96,293
665
491,609
143,635
1 , 019,365
186,083
1 , 499,314
—
1,561
186,083
1 , 500,875
—
181,825
—
924,853
—
906,097
281,696
—
4,479
—
286,175
906,097
( 79 )
608,481
286,096
2 , 621,256
$
472,179 $
4 , 122,131
212
Nonmajor Component Units
District
Other
Agricultural
Component
Associations
Units
Total
$
6,705 $
148,916 $
265,990
—
54,967
54,967
2,994
1,135
66,239
1,245
304
1,549
118
9,098
16,326
513
—
2,764
1,788
50,705
298,756
3,272
191,281
288,847
16,635
456,406
995,438
8,524
534
12,691
283
—
283
—
—
20,255
6
—
360,026
26,226
21,752
237,203
6,293
13,763
117,649
15,370
8,306
515,950
56,702
44,355
1 , 264,057
73,337
500,761
2 , 259,495
—
—
1,561
73,337
500,761
2 , 261,056
263,260
70,229
515,314
—
21,044
945,897
—
9,378
9,378
—
18,666
924,763
—
—
281,696
20,198
1,092
25,769
20,198
29,136
1 , 241,606
51,103
40,218
699,723
334,561
160,627
3 , 402,540
$
407,898 $
661,388 $
5 , 663,596
(concluded)
213
State of California Comprehensive Annual Financial Report
Combining Statement of Activities
Nonmajor Component Units
Year Ended June 30, 2014
(amounts in thousands)
OPERATING EXPENSES
Personal services.
Scholarships and fellowships.
Supplies.
Services and charges.
Depreciation.
Interest expense and fiscal charges
Other.
Total operating expenses.
PROGRAM REVENUES
Charges for services.
Operating grants and contributions
Capital grants and contributions ....
Total program revenues.
Net revenues (expenses) .
GENERAL REVENUES
Investment and interest income.
Other.
Total general revenues.
Change in net position.
Net position - beginning .
Net position - ending.
* Restated
California
State
University
Financing
Auxiliary
Authorities
Organizations
$ 2,208 $
365,497
—
51,190
131,666
997,601
229
48,386
5,031
27,047
31
66,957
139,165
1,556,678
99,756
681,398
28,275
526,329
—
8,166
128,031
1,215,893
( 11 , 134 )
( 340 , 785 )
11,336
230,362
683
415,751
12,019
646,113
885
305,328
285,211 *
2,315,928 *
$ 286,096 $
2,621,256
214
Nonmajor Component Units
District
Other
Agricultural
Component
Associations
Units
Total
$
98,073 $
34,712
$
500,490
—
3,748
54,938
—
10,726
10,726
107,518
35,532
1 , 272,317
22,878
3,043
74,536
1,334
1,483
34,895
2
2,487
69,477
229,805
91,731
2,017,379
223,091
65,664
1 , 069,909
—
9,915
564,519
441
540
9,147
223,532
76,119
1,643,575
( 6 , 273 )
( 15 , 612 )
( 373 , 804 )
73
11,979
253,750
8,313
9,115
433,862
8,386
21,094
687,612
2,113
5,482
313,808
332,448 *
155,145
3 , 088,732
$
334,561 $
160,627
$
3,402,540
215
State of California Comprehensive Annual Financial Report
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216
Statistical Section
State of California Comprehensive Annual Financial Report
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218
Financial Trends
Financial trend schedules contain trend information to help the reader understand how the State’s
financial performance and well-being have changed over time. This section includes the following
financial trend schedules.
Schedule of Net Position by Component
Schedule of Changes in Net Position
Schedule of Fund Balances - Governmental Funds
Schedule of Changes in Fund Balances - Governmental Funds
Sources: The information in the following schedules is derived from the State’s Comprehensive Annual Financial Reports.
219
State of California Comprehensive Annual Financial Report
Schedule of Net Position by Component
For the Past Ten Fiscal Years
(accrual basis of accounting, amounts in thousands)
Governmental activities
Net investment in capital assets.
Restricted - Expendable.
Unrestricted *.
Total governmental activities net position
2005
2006
2007
2008
$ 79,579,676
$ 83,489,137
$ 81,352,744
$ 84,255,048
7,631,057
8,431,279
10,543,602
10,148,648
(52,631,090)
(54,710,847)
(56,519,478)
(69,346,950)
$ 34,579,643
$ 37,209,569
$ 35,376,868
$ 25,056,746
Business-type activities
Net investment in capital assets.
Restricted - Nonexpendable.
Restricted - Expendable.
Unrestricted.
Total business-type activities net position
$ 836,524
7,235,373
1,566,246
$ 9,638,143
$ 818,405
8,722,865
1,801,304
$ 11,342,574
$ 208,268
8,574,932
2,430,492
$ 11,213,692
$ 49,510
6,853,621
3,009,297
$ 9,912,428
Primary government
Net investment in capital assets. $ 80,416,200
Restricted - Nonexpendable. —
Restricted - Expendable. 14,866,430
Unrestricted. (51,064,844)
Total primary government net position. $ 44,217,786
$ 84,307,542
17,154,144
(52,909,543)
$ 48,552,143
$ 81,561,012
19,118,534
(54,088,986)
$ 46,590,560
$ 84,304,558
17,002,269
(66,337,653)
$ 34,969,174
* Governmental activities' unrestricted net position reflects a negative balance because of outstanding bonded debt issued to build capital assets
for school districts and other local govermnental entities.
^ In fiscal year 2011, the net position of governmental activities and business-type activities changed primarily as a result of the reclassification of
the $1.2 billion beginning net position of the California State University Fund from a governmental fund to an enterprise fund.
^ In fiscal year 2014, the net position of governmental activities and business-type activities changed primarily as a result of the reclassification of
the $380 million beginning net position of the Public Buildings Construction Fund from an enterprise fund to an internal service fund.
220
Statistical Section
2009
2010
2011^
$ 83,285,184
$ 84,085,632
$ 85,460,957
8,391,814
14,987,867
27,865,821
(86,302,434)
(103,272,097)
(123,783,314)
$ 5,374,564
$ (4,198,598)
$ (10,456,536)
$ (130,634) $
89,334 $
1,382,957
—
—
21,812
3,855,051
3,404,682
3,615,945
717,740
(4,250,609)
(4,214,494)
$ 4,442,157 $
(756,593) $
806,220
$ 83,154,550
$ 84,174,966
$ 86,843,914
—
—
21,812
12,246,865
18,392,549
31,481,766
(85,584,694)
(107,522,706)
(127,997,808)
$ 9,816,721
$ (4,955,191)
$ (9,650,316)
2012
2013
2014^
$ 80,768,527
$ 84,931,030
$ 94,001,659
24,871,510
24,315,913
24,950,740
(123,897,753)
(117,383,903)
(116,948,128)
$ (18,257,716)
$ (8,136,960)
$ 2,004,271
$ 1,561,258 $
1,718,648 $
2,065,550
21,584
20,627
16,219
4,571,036
5,151,915
4,897,314
(3,346,849)
(2,824,738)
(1,661,692)
$ 2,807,029 $
4,066,452 $
5,317,391
$ 82,329,785
$ 86,649,678
$ 96,067,209
21,584
20,627
16,219
29,442,546
29,467,828
29,848,054
(127,244,602)
(120,208,641)
(118,609,820)
$ (15,450,687)
$ (4,070,508)
$ 7,321,662
221
State of California Comprehensive Annual Financial Report
Schedule of Changes in Net Position
For the Past Ten Fiscal Years
(accrual basis of accounting, amounts in thousands)
2005
2006
2007
2008
Governmental activities
Expenses
General government *.
... $ 10,965,932
$ 10,379,122
$ 14,261,590
$ 13,187,080
Education.
53,152,986
62,652,997
61,542,105
65,130,420
Health and human services.
62,016,344
65,763,380
69,979,980
74,309,784
Resources.
4,160,949
4,161,814
5,316,769
6,333,252
State and consumer services.
1,038,327
595,602
1,214,740
1,129,063
Business and transportation.
7,142,209
8,809,236
9,763,200
13,068,043
Correctional programs.
6,611,219
7,299,124
8,945,325
10,504,182
Interest on long-term debt.
2,408,246
2,893,537
2,596,316
4,184,631
Total expenses.
147,496,212
162,554,812
173,620,025
187,846,455
Program revenues
Charges for services:
General government *.
4,733,155
4,620,030
4,495,166
4,404,126
Education.
2,936,693
3,360,919
2,689,906
3,343,205
Health and human services.
3,280,970
4,554,673
4,751,011
5,191,548
Resources.
1,934,532
2,198,886
2,110,593
2,648,952
State and consumer services.
601,322
640,088
704,512
692,348
Business and transportation.
2,541,072
3,776,098
4,040,268
3,987,958
Correctional programs.
12,354
37,203
30,821
27,702
Operating grants/contributions.
41,135,441
42,254,065
43,440,102
45,849,413
Capital grants/contributions.
1,090,419
1,272,506
1,164,526
1,207,101
Total program revenues.
58,265,958
62,714,468
63,426,905
67,352,353
Total governmental activities net program expenses.
(89,230,254)
(99,840,344)
(110,193,120)
(120,494,102)
General revenues and other changes in net position
General revenues:
Personal income taxes.
42,504,352
51,251,266
53,272,229
55,355,266
Sales and use taxes.
32,488,563
34,162,177
35,427,013
34,856,824
Corporation taxes.
11,174,937
10,735,792
11,211,267
11,207,468
Motor vehicle excise taxes ^.
—
—
—
—
Insurance taxes.
2,231,060
2,212,916
2,165,567
2,190,870
Other taxes ^.
2,507,729
2,099,075
5,939,890
5,594,970
Investment and interest.
289,363
504,655
730,066
639,059
Escheat.
525,897
291,549
334,002
282,287
Transfers.
27,727
23,259
29,855
54,994
Special item ^.
—
1,218,311
—
—
Total general revenues
and other changes in net position.
91,749,628
102,499,000
109,109,889
110,181,738
Total governmental activities change in net position.
... $ 2,519,374
$ 2,658,656
$ (1,083,231)
$ (10,312,364)
^ Tax relief program expenses and revenue reported separately prior to fiscal year 2009 are now included with general government.
^ Motor vehicle excise taxes, reported separately in fiscal year 2012 due to material increases, were included with “Other taxes” in prior years.
^ In fiscal year 2006, a related organization assumed debt on the State's behalf. In fiscal year 2014, a component unit assumed debt on
behalf of the primary government.
^ In fiscal year 2011, the California State University Fund was reclassified from a governmental fund to an enterprise fund.
^ In fiscal year 2014, the Public Buildings Construction Fund was reclassified from an enterprise fund to an internal service fund.
222
Statistical Section
2009 2010
$ 13,895,948
$ 12,454,969
65,643,486
61,764,385
79,077,015
80,799,454
5,626,359
6,019,104
1,518,402
979,962
11,980,315
14,155,767
10,835,203
10,310,229
3,801,283
4,146,259
192,378,011
190,630,129
4,781,126
4,918,132
3,483,072
4,231,692
4,256,069
3,769,794
2,578,738
2,597,712
658,486
654,034
4,210,461
5,420,261
21,592
18,097
57,828,622
75,469,783
1,142,691
962,388
78,960,857
98,041,893
(113,417,154)
(92,588,236)
45,709,344
43,866,857
31,244,979
33,784,106
10,741,140
9,472,611
2,063,555
2,235,251
5,264,685
5,234,531
175,584
114,933
315,642
149,996
21,015
(13,441,875)
95,535,944
81,416,410
$ (17,881,210)
$ (11,171,826)
2011 ^ 2012
$ 13,520,557
$ 14,411,737
56,486,944
51,288,647
92,475,364
89,939,730
5,853,278
5,950,635
1,405,019
1,241,269
11,119,644
13,719,927
10,295,564
10,343,574
4,377,064
4,365,181
195,533,434
191,260,700
5,057,082
6,841,334
110,423
81,212
8,471,261
4,940,650
2,797,264
2,866,232
660,196
724,222
4,010,433
4,342,668
14,981
16,757
67,849,215
58,777,006
1,272,326
2,193,189
90,243,181
80,783,270
(105,290,253)
(110,477,430)
51,719,107
54,368,347
33,521,221
31,216,438
9,384,416
8,629,935
—
5,263,435
2,311,880
2,408,473
7,768,010
2,368,748
62,946
72,237
229,146
372,215
(3,251,598)
(2,031,032)
101,745,128
102,668,796
$ (3,545,125)
$ (7,808,634)
2013 2014^
$ 15,390,100
$ 14,292,179
50,586,387
54,719,677
94,069,749
105,037,102
5,670,922
5,854,685
1,475,486
589,715
12,836,192
13,427,229
10,081,736
11,234,705
4,349,632
4,699,265
194,460,204
209,854,557
6,196,586
5,994,608
64,480
67,165
8,761,781
7,961,897
3,269,315
3,403,524
682,503
586,055
4,082,616
4,247,258
45,153
13,645
60,943,536
69,861,130
1,669,021
1,515,890
85,714,991
93,651,172
(108,745,213)
(116,203,385)
67,502,738
68,793,292
33,839,065
36,477,724
7,289,910
9,102,128
5,219,605
5,777,167
2,295,579
3,359,043
2,498,248
2,302,231
57,285
80,969
551,580
487,937
(1,997,759)
(2,296,010)
—
(54,537)
117,256,251
124,029,944
$ 8,511,038
$ 7,826,559
(continued)
223
State of California Comprehensive Annual Financial Report
Schedule of Changes in Net Position (continued)
For the Past Ten Fiscal Years
(accrual basis of accounting, amounts in thousands)
2005
2006
2007
2008
Business-type activities
Expenses
Electric Power.
.... $ 5,655,000
$ 5 , 342,000
$ 5,865,000
$ 5,362,000
Water Resources.
731,393
949,691
951,590
1,009,214
Public Buildings Construction ^.
299,900
334,094
334,777
371,904
State Lottery.
3,493,984
3 , 911,717
3,470,615
3,173,060
Unemployment Programs.
8,939,654
8 , 584,521
9,136,218
10,622,582
California State University .
—
—
—
—
High Technology Education.
33,690
30,871
22,704
16,916
Toll Facilities.
20,861
18,265
—
—
State University Dormitory Building
Maintenance and Equipment.
449,080
491,914
844,798
699,018
State Water Pollution Control Revolving.
14,638
20,427
12,702
13,056
Housing Loan.
142,085
138,988
127,206
132,101
Other enterprise programs.
86,612
113,976
141,859
122,921
Total expenses .
19,866,897
19,936,464
20,907,469
21,522,772
Program revenues
Charges for services:
Electric Power.
5,655,000
5,342,000
5,865,000
5,362,000
Water Resources.
750,282
949,691
951,590
1,009,214
Public Buildings Construction ^.
315,718
384,442
396,895
384,816
State Lottery.
3,512,126
3,740,041
3,461,699
3,242,828
Unemployment Programs.
10,459,688
10,263,447
9,017,969
8,829,018
California State University .
—
—
—
—
High Technology Education.
36,737
26,508
22,966
20,600
Toll Facilities.
66
21
—
—
State University Dormitory Building
Maintenance and Equipment.
395,396
512,231
554,851
640,208
State Water Pollution Control Revolving.
55,218
64,740
78,564
71,404
Housing Loan.
121,063
127,733
130,293
130,139
Other enterprise programs.
115,901
129,048
134,018
137,476
Operating grants/contributions.
—
—
—
—
Capital grants/contributions.
73,182
56,942
182,989
189,064
Total program revenues .
21,490,377
21,596,844
20,796,834
20,016,767
Total business-type activities
net program revenues (expenses) .
1,623,480
1,660,380
(110,635)
(1,506,005)
Other changes in net position
Transfers.
(27,727)
(23,259)
(29,855)
(54,994)
Special item ^.
—
—
—
—
Total business-type activities change in net position .
1,595,753
1,637,121
(140,490)
(1,560,999)
Total primary government change in net position .
.... $ 4,115,127
$ 4,295,777
$ (1,223,721)
$ (11,873,363)
224
Statistical Section
2009
2010
2011
2012
2013
2014
$ 4,560,000
$ 3,908,000
$ 2,317,000
$ 915,000
$ 488,000
$ 835,000
914,837
1,069,662
1,115,793
1,047,574
1,127,195
983,048
420,465
494,332
390,173
403,853
410,404
—
3,069,365
3,166,447
3,507,524
4,431,709
4,499,451
5,078,935
19,609,068
29,614,598
25,619,138
21,111,658
17,599,219
13,673,403
—
—
5,851,355
6,181,397
6,196,541
6,544,936
15,590
15,025
9,590
7,778
6,568
847
486,349
856,106
12,261
16,893
10,953
8,780
3,698
5,072
130,777
122,114
104,667
89,570
70,356
57,206
147,441
130,329
118,006
78,601
58,578
79,641
29,366,153
39,393,506
39,044,199
34,275,920
30,460,010
27,258,088
4,560,000
3,908,000
2,317,000
915,000
488,000
835,000
914,837
1,069,662
1,115,793
1,047,574
1,127,195
983,048
366,151
430,069
456,467
428,260
616,041
—
3,051,320
3,145,259
3,484,689
4,484,291
4,445,921
5,077,976
14,273,975
11,255,098
24,678,783
21,947,781
18,597,962
15,167,258
—
—
2,505,545
2,915,123
2,891,432
3,014,030
15,975
13,015
10,498
8,452
5,585
424
811,454
599,571
59,923
56,121
55,957
57,540
60,173
62,985
109,636
85,321
89,224
84,830
66,050
65,247
124,952
98,957
105,676
74,693
80,540
77,671
—
—
1,216,808
1,249,995
1,323,345
1,491,559
71,882
91,808
86,272
106,057
142,304
80,903
24,360,105
20,752,881
36,122,712
33,319,596
29,844,548
26,856,101
(5,006,048)
(18,640,625)
(2,921,487)
(956,324)
(615,462)
(401,987)
(21,015)
13,441,875
3,251,598
2,031,032
1,997,759
2,296,010
—
—
—
—
—
(26,913)
(5,027,063)
(5,198,750)
330,111
1,074,708
1,382,297
1,867,110
$ (22,908,273)
$ (16,370,576)
$ (3,215,014)
$ (6,733,926)
$ 9,893,335
$ 9,693,669
(concluded)
225
State of California Comprehensive Annual Financial Report
Schedule of Fund Balances - Governmental Funds
For the Past Ten Fiscal Years
(modified accrual basis of accounting, amounts in thousands)
2005 _2006_2007_ 2008
General Fund
Reserved. $ 1,597,085 $ 1,999,953 $ 2,596,537 $ 2,113,149
Unreserved. (1,410,228) 672,862 (4,504,075) (6,282,018)
Nonspendable
Restricted.
Committed ....
Unassigned ....
Total General Fund. $ 186,857 $ 2,672,815 $ (1,907,538) $ (4,168,869)
All other governmental funds
Reserved. $ 14,924,365 $ 16,198,481 $ 21,955,300 $ 19,512,083
Unreserved, reported in:
Special revenue funds. (329,018) (806,558) (914,843) (1,817,290)
Capital projects funds. (403,106) (882,550) (1,128,608) (837,349)
Nonspendable. — — — —
Restricted. — — — —
Committed. — — — —
Assigned. — — — —
Unassigned. — — — —
Total all other governmental funds. $ 14,192,241 $ 14,509,373 $ 19,911,849 $ 16,857,444
Note: In fiscal year 2011, the State implemented GASB Statement No. 54, which significantly changed the fund balance
classifications. Fiscal year 2011 and subsequent fund balance classifications are not comparable to prior years’ classifications.
* In fiscal year 2011, the California State University Fund, which consisted of $ 1.2 billion beginning fund balance, was reclassified from
a governmental fund to an enterprise fund.
226
Statistical Section
2009
2010
2011 ‘
2012
2013
2014
$ 2,260,504
$ 1,320,782
$ —
$ —
$ —
$ —
(18,344,400)
(20,929,640)
—
—
—
—
—
—
148,019
7,614
140,107
128,609
—
—
156,496
80,849
178,643
394,246
—
—
29,850
19,600
22,879
125,120
—
—
(20,273,606)
(23,069,351)
(14,596,085)
(8,092,571)
$ (16,083,896)
$ (19,608,858)
$ (19,939,241)
$ (22,961,288)
$ (14,254,456)
$ (7,444,596)
$ 27,465,566
$ 41,087,578
$ —
$ —
$ —
$ —
(3,539,254)
(8,554,611)
—
—
—
—
686,113
838,879
—
—
—
—
—
—
39,448
—
15,022
27,260
—
—
27,709,325
24,790,661
24,137,270
24,269,093
—
—
2,701,702
2,109,089
2,318,035
2,914,747
—
—
268,888
3
209,171
18,857
—
—
(21,847)
(103,177)
(176,066)
(20,145)
$ 24,612,425
$ 33,371,846
$ 30,697,516
$ 26,796,576
$ 26,503,432
$ 27,209,812
111
State of California Comprehensive Annual Financial Report
Schedule of Changes in Fund
Balances - Governmental Funds
For the Past Ten Fiscal Years
(modified accrual basis of accounting, amounts in thousands)
2005
2006
2007
2008
Revenues
Personal income taxes.
$ 42,595,352
$ 50,798,418
$ 53,289,524
$ 55,197,062
Sales and use taxes.
32,201,242
34,300,402
35,451,311
34,764,651
Corporation taxes.
11,191,937
10,709,792
11,210,267
11,201,468
Motor vehicle excise taxes *.
—
—
—
—
Insurance taxes.
2,231,060
2,212,916
2,165,567
2,190,870
Other taxes *.
2,482,335
2,367,670
5,800,027
5,675,894
Intergovernmental.
42,933,381
45,466,185
46,442,519
48,969,006
Licenses and permits.
4,954,025
5,125,223
5,266,142
5,326,854
Charges for services.
949,147
1,002,410
911,387
1,025,569
Fees and penalties.
5,388,332
6,008,306
6,093,948
6,800,633
Investment and interest.
576,097
1,058,119
1,555,202
1,591,025
Escheat.
525,897
291,549
334,002
282,287
Other.
3,755,426
4,518,621
3,732,591
4,265,010
Total revenues .
149,784,231
163,859,611
172,252,487
177,290,329
Expenditures
General government ^.
10,647,740
9,394,308
14,062,920
12,745,860
Education.
52,242,779
59,768,677
61,103,008
64,367,612
Health and human services.
62,015,628
65,968,433
70,157,806
74,102,708
Resources.
4,077,102
4,296,715
5,191,078
6,123,609
State and consumer services.
973,466
1,111,128
1,214,752
1,239,397
Business and transportation.
8,556,618
10,370,589
11,485,069
14,747,506
Correctional programs.
6,658,614
7,552,790
9,030,299
9,972,507
Capital outlay.
1,534,150
2,128,050
1,345,021
1,724,074
Debt service:
Bond and commercial paper retirement.
3,672,119
6,375,607
5,691,791
8,970,533
Interest and fiscal charges.
2,243,764
3,135,763
2,881,849
3,394,433
Total expenditures .
152,621,980
170,102,060
182,163,593
197,388,239
Excess (deficiency) of revenues over (under) expenditures..
(2,837,749)
(6,242,449)
(9,911,106)
(20,097,910)
Other Ilnancing sources (uses)
General obligation bonds and commercial paper issued.
5,058,339
7,750,500
9,040,500
14,193,760
Revenue bonds issued.
99,250
—
—
—
Refiinding/remarketing debt issued.
1,937,430
5,086,944
9,098,376
1,798,685
Payment to refund/remarket long-term debt.
(1,937,430)
(4,561,944)
(7,840,621)
(1,844,006)
Premium on bonds issued ^.
—
—
—
295,439
Proceeds from loans.
—
—
—
—
Capital leases * .
414,738
748,037
178,936
268,686
Transfers in.
4,580,201
5,137,895
9,311,462
11,414,132
Transfers out.
(4,546,792)
(5,113,107)
(9,242,771)
(11,336,764)
Total other flnancing sources .
5,605,736
9,048,325
10,545,882
14,789,932
Total change in fund balance ..
$ 2,767,987
$ 2,805,876
$ 634,776
$ (5,307,978)
Debt service as a percentage of noncapital expenditures.
3.9%
5.7%
4.7%
6.3%
^ Motor vehicle excise taxes, reported separately in fiscal year 2012 due to material increases, were included with “Other taxes” in prior years.
^ Tax relief program expenditures reported separately prior to fiscal year 2009 are now included with general government.
^ Prior to fiscal year 2008, premiums on bonds issued were netted against debt service interest and fiscal charges.
^ In fiscal year 2011, the California State University Fund was reclassified from a governmental fund to an enterprise fund.
228
Statistical Section
2009
2010
2011'*
$ 45,482,726
$ 43,884,798
$ 51,691,153
31,425,308
33,696,412
33,488,805
10,738,140
9,467,611
9,433,416
2,063,555
2,235,251
2,311,881
5,245,416
5,235,801
7,829,662
61,053,091
79,183,291
69,160,916
5,805,369
6,900,747
6,767,437
986,773
974,181
1,008,647
6,204,288
7,291,894
10,262,387
1,108,058
281,881
212,116
315,642
149,996
229,146
3,933,035
3,555,282
2,941,484
174,361,401
192,857,145
195,337,050
13,075,901
12,036,503
12,997,651
63,857,066
59,229,726
55,547,139
78,731,136
80,321,470
91,941,309
5,209,684
5,456,904
5,254,757
1,266,068
1,088,494
1,183,536
13,803,518
14,083,790
13,181,390
9,883,593
9,553,992
9,253,791
1,432,376
1,691,674
1,128,011
5,131,600
3,259,203
3,118,906
3,584,358
4,022,922
4,355,110
195,975,300
190,744,678
197,961,600
(21,613,899)
2,112,467
(2,624,550)
16,764,085
12,039,472
4,525,000
97,635
—
—
—
4,176,050
—
—
(4,221,604)
—
126,107
267,980
32,607
—
1,996,737
35,538
364,813
811,816
204,631
6,776,476
6,548,447
8,705,229
(6,689,658)
(19,952,766)
(11,902,800)
17,439,458
1,666,132
1,600,205
$ (4,174,441)
$ 3,778,599
$ (1,024,345)
4.5%
3.9%
3.8%
2012 2013 2014
$ 54,442,733
$ 67,424,576
$ 68,771,667
31,205,183
33,869,961
36,409,311
8,609,935
7,261,910
9,242,454
5,263,435
5,219,605
5,777,167
2,408,473
2,295,579
3,359,043
2,306,717
2,425,184
2,297,025
62,235,671
64,418,808
73,000,600
6,600,001
6,659,078
6,957,117
728,980
741,201
769,302
8,315,452
10,673,104
9,757,476
175,898
135,928
137,754
372,215
551,580
488,945
2,542,505
3,227,347
2,903,335
185,207,198
204,903,861
219,871,196
13,484,305
15,748,069
14,778,214
50,362,337
49,692,763
53,309,436
89,473,391
94,621,630
104,781,494
5,358,575
5,318,332
5,508,860
1,219,499
1,259,392
621,037
15,684,611
15,008,671
15,721,532
9,805,846
9,681,086
10,395,234
1,296,413
1,222,342
1,909,010
4,435,992
5,189,150
7,002,941
4,453,643
4,363,260
4,321,040
195,574,612
202,104,695
218,348,798
(10,367,414)
2,799,166
1,522,398
4,165,515
4,038,095
5,082,305
4,300,555
4,634,365
2,077,330
(4,508,834)
(3,174,613)
(328,024)
667,931
964,211
505,026
528,804
710,440
1,486,204
5,523,644
2,957,762
4,041,250
(7,499,131)
(4,898,754)
(6,304,047)
3,178,484
5,231,506
6,560,044
$ (7,188,930)
$ 8,030,672
$ 8,082,442
4.6%
4.8%
5.2%
229
State of California Comprehensive Annual Financial Report
This page intentionally left blank
230
Revenue Capacity
Revenue capacity schedules contain information to help the reader assess the State’s capacity to raise
revenue and the sources of that revenue. This section includes the following revenue capacity
schedules.
Schedule of Revenue Base
Schedule of Revenue Payers by Industry/Income Level
Schedule of Personal Income Tax Rates
231
State of California Comprehensive Annual Financial Report
Schedule of Revenue Base
For the Past Ten Calendar Years
(amounts in thousands)
2004
2005
2006
2007
Personal Income by Industry
(all items restated as footnoted) *
Farm earnings.
. $ 12,322,433
$ 12,293,563
$ 10,502,902
$ 12,863,060
Forestry, fishing, and other natural resources.
5,294,017
5,297,340
6,066,166
6,233,699
Mining.
3,043,981
3,424,432
4,165,677
4,176,102
Construction and utilities.
78,401,346
83,625,469
88,987,518
84,582,353
Manufacturing.
113,519,462
117,178,686
122,230,122
124,761,057
Wholesale trade.
47,430,783
50,654,666
54,567,859
58,438,881
Retail trade.
70,716,361
73,229,969
75,214,254
75,601,717
Transportation and warehousing.
29,476,808
30,156,650
31,592,849
32,801,341
Information, finance, and insurance.
118,186,279
123,795,537
128,340,864
131,366,347
Real estate.
30,195,066
29,891,241
27,965,840
21,311,535
Services.
345,247,755
361,118,487
389,562,325
409,727,938
Federal, civilian.
19,817,459
20,752,518
20,978,437
21,578,358
Military.
. 11,934,474
12,363,039
12,812,404
13,447,304
State and local government.
149,072,533
155,244,124
164,416,341
176,638,739
Other ^.
287,156,727
316,966,493
361,905,283
390,760,904
Total personal income.
. $ 1,321,815,484
$ 1,395,992,214
$ 1,499,308,841
$ 1,564,289,335
Average effective rate ^.
4.5%
4.6%
5.1%
5.0%
Source: Bureau of Economic Analysis, U.S. Department of Commerce
^ 2004-2012 information updated.
^ Other personal income includes dividends, interest, rental income, residence adjustment, government transfers for individuals, and deductions
for social insurance.
^ The total direct rate for personal income is not available. The average effective rate equals personal income tax revenue divided by adjusted
gross income.
232
Statistical Section
2008 2009 2010
$ 11 , 085,038
$ 12 , 113,947
$ 12 , 557,572
6 , 187,051
6 , 127,860
6 , 688,211
6 , 137,953
4 , 001,858
5 , 050,332
76 , 445,719
63 , 216,733
58 , 750,008
122 , 428,281
113 , 614,593
116 , 160,042
57 , 837,584
52 , 413,990
53 , 651,640
69 , 458,834
66 , 365,074
67 , 715,988
32 , 256,160
30 , 368,585
31 , 087,284
126 , 010,535
121 , 932,283
125 , 369,696
21 , 821,327
19 , 921,652
20 , 855,431
429 , 018,004
412 , 103,397
423 , 008,875
22 , 347,584
23 , 426,267
25 , 978,417
14 , 560,197
15 , 558,704
16 , 264,215
185 , 038,204
184 , 143,378
185 , 261,156
415 , 597,502
411 , 786,355
430 , 154,572
$ 1 , 596 , 229,973
$ 1 , 537 , 094,676
$ 1 , 578 , 553,439
5 . 7 %
5 . 2 %
4 . 7 %
2011
2012
2013
$ 15 , 887,490
$ 15 , 724,952
$ 17 , 155,685
6 , 900,901
7 , 730,465
8 , 180,241
6 , 134,672
6 , 767,992
6 , 892,409
60 , 811,474
66 , 192,913
71 , 798,914
120 , 509,059
125 , 372,884
126 , 542,447
57 , 504,570
60 , 346,943
63 , 119,835
70 , 779,805
74 , 387,050
76 , 817,610
33 , 824,988
35 , 186,355
36 , 740,615
129 , 712,308
142 , 161,282
154 , 146,768
25 , 097,591
40 , 013,799
42 , 849,117
450 , 544,104
483 , 052,428
501 , 619,418
26 , 293,383
26 , 450,620
26 , 072,762
16 , 059,376
15 , 911,335
15 , 348,981
189 , 532,850
188 , 383,565
191 , 327,085
476 , 042,917
517 , 511,186
518 , 002,299
$ 1 , 685 , 635,488
$ 1 , 805 , 193,769
$ 1 , 856 , 614,186
5 . 3 %
5 . 0 %
6 . 1 %
(continued)
233
State of California Comprehensive Annual Financial Report
Schedule of Revenue Base (continued)
For the Past Ten Calendar Years
(amounts in thousands)
Taxable Sales by Industry *
Retail
Apparel.
General merchandise.
Specialty.
Food.
Restaurant and bars.
Household.
Building materials.
Automotive.
Other.
Business and personal service
All other.
Total taxable sales.
Direct sales tax rate ^.
2004
$ 16,957,137
53,939,532
48,961,996
19,825,771
43,275,038
16,405,347
34,154,543
103,528,856
13,124,468
22,306,787
127,597,308
$ 500 , 076,783
5.25%
2005
$ 18,712,125
56,787,153
52,376,758
21,128,469
46,412,847
17,388,704
36,152,218
112,167,922
14,681,929
23,090,910
138,005,393
$ 536 , 904,428
5.25%
2006
$ 19,829,416
59,264,894
54,695,680
21,864,179
49,229,418
17,383,449
36,163,326
115,154,535
15,481,675
23,650,322
146,935,543
$ 559 , 652,437
5.25%
2007
$ 20,855,890
59,897,350
34,122,471
22,461,059
51,658,575
16,720,852
32,656,324
117,864,918
30,787,663
23,355,672
150,669,375
$ 561 , 050,149
5.25%
Taxable Sales by Industry (Using NAICS Codes) *
Retail and Food Services
Motor vehicle and parts dealers.
Furniture and home furnishings stores.
Electronics and appliance stores.
Building materials, garden equipment and supplies
Food and beverage.
Health and personal care stores.
Gasoline stations.
Clothing and clothing accessories stores.
Sporting goods, hobby, book and music stores.
General merchandise stores.
Miscellaneous store retailers.
Nonstore retailers.
Food services and drinking places.
All other outlets.
Total taxable sales.
Direct sales tax rate ^
Source: California State Board of Equalization (BOE)
* Due to the BOE’s conversion from business coding to North American Industry Classification System (NAICS) coding for the reporting of Taxable
Sales by Industry, industry level data for 2009 and forward is not comparable to that reported for prior years. The NAICS conversion process for over
one million permit holders was not completed until the end of 2008, so 2009 was the first year the BOE used the new fonnat with NAICS codes.
^ The direct sales tax rate used is the state tax rate that provides revenue to the State's General Fund and debt service fund. It does not include the 1 %
local tax rate that is allocated to cities and counties.
^ Rate change was effective on April 1, 2009.
^ Rate change was effective on January 1, 2013.
234
Statistical Section
2008 2009 ‘ 2010 2011 2012 2013
$ 22,120,094
56,425,472
27,380,740
21,504,308
52,051,404
17,199,187
26,647,007
106,555,420
27,434,795
22,045,958
152,289,155
$ 531 , 653,540
5.25%
$ 44,488,198
8,481,020
13,384,338
23,978,313
22,546,285
9,244,958
39,077,835
25,641,272
10,294,172
44,921,639
16,385,169
2,849,864
49,921,543
145,278,339
$ 456 , 492,945
6.25% ^
$ 47,355,568
8,742,984
13,749,019
24,750,865
22,787,407
9,525,910
45,226,491
27,267,430
10,365,480
46,323,804
16,569,690
2,830,615
51,282,453
150,570,269
$ 477 , 347,985
6.25%
$ 53,303,501
9,280,688
14.297.402
26,064,428
23,606,132
10,309,491
55,210,076
29,600,057
10,602,711
48,219,018
17.187.402
3,081,188
54,755,944
165,050,017
6.25%
$ 61,547,848
9,937,187
14,744,723
27,438,083
24,511,714
10,787,801
58,006,168
32,357,516
10,751,814
49,996,451
17,880,765
4,375,432
59,037,320
177,014,427
6.25%
$ 67,986,436
10,645,523
14,765,485
29,680,053
25,289,203
11,294,049
56,860,585
34,918,036
11,113,831
51,431,094
18,382,224
7,296,839
62,776,360
184,399,899
$ 586 , 839,617
6.50%
(concluded)
$ 520 , 568,055 $ 558 , 387,249
235
State of California Comprehensive Annual Financial Report
Schedule of Revenue Payers by Industry/Income Level
For Calendar Years 2004 and 2012
Personal Income Tax Filers and Liability by Income Level ^
2004
Number
Percent
Tax
Percent
of Filers
of Total
Liability ^
of Total
Under
$ 5,000 .
. 1,046,035
7.6 %
$
6,556
0.0 %
5,000
to
9,999 .
. 1,127,452
8.2
8,732
0.0
10,000
to
14,999 .
. 1,182,376
8.5
23,624
0.1
15,000
to
19,999 .
. 1,155,257
8.4
56,241
0.2
20,000
to
24,999 .
. 1,000,292
7.2
117,178
0.3
25,000
to
29,999 .
. 946,276
6.8
194,776
0.5
30,000
to
39,999 .
. 1,478,641
10.7
571,029
1.6
40,000
to
49,999 .
. 1,192,237
8.6
861,190
2.4
50,000
to
99,999 .
. 2,960,452
21.4
5,502,410
15.2
$ 100,000
and over .
. 1,743,792
12.6
28,751,605
79.7
Total.
. 13,832,810
100.0 %
$
36,093,341
100.0 %
2012
Number
Percent
Tax
Percent
of Filers
of Total
Liability ^
of Total
Under
$ 5,000 .
. 1,099,380
7.2 %
$
17,845
0.0 %
5,000
to
9,999 .
. 1,168,312
7.7
10,997
0.0
10,000
to
14,999 .
. 1,258,123
8.3
15,843
0.0
15,000
to
19,999 .
. 1,211,517
8.0
37,876
0.1
20,000
to
24,999 .
. 1,073,926
7.1
77,303
0.1
25,000
to
29,999 .
. 947,288
6.2
134,924
0.2
30,000
to
39,999 .
. 1,529,957
10.1
440,170
0.7
40,000
to
49,999 .
. 1,143,878
7.5
636,952
1.1
50,000
to
99,999 .
. 3,188,832
21.0
5,488,062
9.2
$ 100,000
and over .
. 2,578,523
16.9
53,055,134
88.6
Total.
. 15,199,736
100.0 %
$
59,915,106
100.0 %
Source: California Franchise Tax Board
^ For California resident tax returns. Calendar year 2012 is the most recent year for which data are available.
^ Amounts are in thousands.
236
Statistical Section
For Calendar Years 2004 and 2013
Sales Tax Permits and Tax Liability by Industry
2004 (Using Business Codes) *
Number
Percent
Tax
Percent
of Permits ^
of Total
Liability ^
of Total
Retail:
Apparel.
General merchandise.
Specialty.
Food.
Restaurant and bars.
Flousehold.
Building materials.
Automotive.
Other.
Business and personal service.
All other.
Total.
39,018
15,543
205,644
24,885
83,761
32,371
10,766
35,828
22,441
103,873
474,283
3.7 %
1.5
19.6
2.4
8.0
3.1
1.1
3.4
2.1
9.9
45.2
$
890,250
2,831,825
2,570,505
1,040,853
2,271,939
861,281
1,793,114
5,435,265
689,035
1,171,106
6,698,859
3.4 %
10.8
9.8
4.0
8.7
3.3
6.8
20.7
2.6
4.4
25.5
1,048,413
100.0 %
$
26,254,032
100.0 %
2013 (Using
NAICS Codes) ‘
Number
of Permits ^
Percent
of Total
Tax
Liability ^
Percent
of Total
Retail and Food Services:
Motor vehicle and parts dealers.
32,324
3.3 %
$
4,419,118
11.6 %
Furniture and home furnishings stores.
17,102
1.7
691,959
1.8
Electronics and appliance stores.
21,062
2.1
959,757
2.5
Building materials, garden equipment & supplies.
16,323
1.7
1,929,203
5.1
Food and beverage.
31,132
3.3
1,643,798
4.3
Flealth and personal care stores.
22,589
2.3
734,113
1.9
Gasoline stations.
9,798
1.1
3,695,938
9.7
Clothing and clothing accessories stores.
62,164
6.3
2,269,672
6.0
Sporting goods, hobby, book & music stores.
26,732
2.7
722,399
1.9
General merchandise stores.
15,031
1.5
3,343,023
8.8
Miscellaneous store retailers.
112,346
11.4
1,194,845
3.1
Nonstore retailers.
202,082
20.6
474,295
1.2
Food services and drinking places.
96,594
9.8
4,080,463
10.7
All other outlets.
316,477
32.2
11,985,993
31.4
Total.
981,756
100.0 %
$
38,144,576
100.0 %
Source: California State Board of Equalization (BOE)
^ Due to the BOE’s conversion from business coding to North American Industry Classification System (NAICS) coding for the reporting of Taxable
Sales by Industry, industry level data for 2009 and forward is not comparable to that reported for prior years. The NAICS conversion process for over
one million permit holders was not completed until the end of 2008, so 2009 was the first year the BOE used the new format with NAICS codes.
^ As of July I.
^ Calculated by multiplying the taxable sales by industry shown on pages 234 and 235 by the direct sales tax rate. Amounts are in thousands.
237
State of California Comprehensive Annual Financial Report
Schedule of Personal Income Tax Rates
For Calendar Years 2004-2013
Married Filing Jointly and Surviving Sponse
2004
2005*
2006
2007
Tax Rate ^
Income Level
Ineome Level
Ineome Level
Income Level
1.0
Up to $12,294
Up to $12,638
Up to $13,244
Up to $13,654
2.0
12,294-29,142
12,638-29,958
13,244-31,963
13,654-32,370
4.0
29,142-45,994
29,958-47,282
31,963 -49,552
32,370-51,088
6.0
45,994 - 63,850
47,282 - 65,638
49,552-68,788
51,088-70,920
8.0
63,850 - 80,692
65,638 - 82,952
68,788-86,934
70,920 - 89,628
9.3
$80,692 and over
82,952 - 999,999
86,934 - 999,999
89,628 - 999,999
10.3
11.3
12.3
13.3
—
$1 million and over
$ 1 million and over
$1 million and over
Single and Married Filing Separately
2004
2005*
2006
2007
Tax Rate ^
Income Level
Income Level
Income Level
Income Level
1.0
Up to $6,147
Up to $6,319
Up to $6,622
Up to $6,827
2.0
6,147- 14,571
6,319-14,979
6,622- 15,698
6,827- 16,185
4.0
14,571 -22,997
14,979-23,641
15,698-24,776
16,185 -25,544
6.0
22,997-31,925
23,641 -32,819
24,776 - 34,394
25,544 - 35,460
8.0
31,925-40,346
32,819-41,476
34,394-43,467
35,460-44,814
9.3
$40,346 and over
41,476-999,999
43,467-999,999
44,814-999,999
10.3
11.3
12.3
13.3
—
$1 million and over
$1 million and over
$1 million and over
Flead of Honsehold
2004
2005*
2006
2007
Tax Rate ^
Ineome Level
Income Level
Income Level
Income Level
1.0
Up to $12,300
Up to $12,644
Up to $13,251
Up to $13,662
2.0
12,300-29,143
12,644 - 29,959
13,251 -31,397
13,662-32,370
4.0
29,143-37,567
29,959-38,619
31,397-40,473
32,370-41,728
6.0
37,567 - 46,494
38,619-47,796
40,473 - 50,090
41,728-51,643
8.0
46,494-54,918
47,796 - 56,456
50,090-59,166
51,643-61,000
9.3
$54,918 and over
56,456 - 999,999
59,166-999,999
61,000-999,999
10.3
11.3
—
$1 million and over
$1 million and over
$1 million and over
12.3
13.3
—
—
—
—
Source: California Franchise Tax Board (FTB)
^ Beginning in 2005, there is an additional tax of 1% on taxable income over
$1 million for the expansion of mental health services.
^ FTB tax brackets are indexed to the California Consumer Price Index and are adjusted accordingly
on a yearly basis.
Average Effective Rate
(amounts in thousands)
2004
2005
2006
2007
Personal income tax revenue ^.
$ 37,722,839
$ 42,595,352
$ 50,798,418
$ 53,289,524
$ 841,229,496
$ 932,142,017
4.6%
$ 990,695,484
5.1%
$ 1,059,967,500
5.0%
Average effective rate ^.
4.5%
^ Personal income tax revenue is reported on a fiscal year basis.
^ Source: California Franchise Tax Board. Fiscal year 2013 infomiation reflects returns processed as of December 2014.
^ The average effective rate equals personal income tax revenue divided by adjusted gross income.
238
Statistical Section
Married Filing Jointly and Surviving Spouse
2008
2009
2010
2011
2012
2013
Income Level
Income Level
Income Level
Income Level
Income Level
Income Level
Up to $14,336
Up to $14,120
Up to $14,248
Up to $14,632
Up to $14,910
Up to $15,164
14,336-33,988
14,120-33,478
14,248 - 33,780
14,632 - 34,692
14,910-35,352
15,164-35,952
33,988-53,642
33,478-52,838
33,780-53,314
34,692 - 54,754
35,352 - 55,794
35,952 - 56,742
53,642 - 74,466
52,838-73,350
53,314-74,010
54,754 - 76,008
55,794 - 77,452
56,742 - 78,768
74,466-94,110
73,350-92,698
74,010-93,532
76,008-96,058
77,452 - 97,884
78,768 - 99,548
94,110-999,999
92,698 - 999,999
93,532 - 999,999
96,058 - 999,999
97,884 - 500,000
99,548 - 508,500
$ 1 million and over
$1 million and over
$ 1 million and over
$1 million and over
500,000 - 600,000
508,500-610,200
—
—
—
—
600,000 - 999,999
610,200-999,999
—
—
—
—
$ 1 million and over
1,000,000-1,017,000
—
—
—
—
—
$1,017,000 and over
Single and Married Filing Separately
2008
2009
2010
2011
2012
2013
Income Level
Income Level
Income Level
Income Level
Income Level
Income Level
Up to $7,168
Up to $7,060
Up to $7,124
Up to $7,316
Up to $7,455
Up to $7,582
7,168- 16,994
7,060- 16,739
7,124- 16,890
7,316-17,346
7,455 - 17,676
7,582- 17,976
16,994-26,821
16,739-26,419
16,890-26,657
17,346 - 27,377
17,676-27,897
17,976-28,371
26,821 - 37,233
26,419-36,675
26,657 - 37,005
27,377 - 38,004
27,897 - 38,726
28,371-39,384
37,233 - 47,055
36,675 - 46,349
37,005-46,766
38,004-48,029
38,726 - 48,942
39,384-49,774
47,055 - 999,999
46,349 - 999,999
46,766 - 999,999
48,029 - 999,999
48,942 - 250,000
49,774 - 254,250
$ 1 million and over
$1 million and over
$ 1 million and over
$1 million and over
250,000 - 300,000
254,250-305,100
—
—
—
—
300,000 - 500,000
305,100-508,500
—
—
—
—
$500,000 and over
508,500 - 999,999
—
—
—
—
—
$1 million and over
Head of Household
2008
2009
2010
2011
2012
2013
Income Level
Income Level
Income Level
Income Level
Income Level
Income Level
Up to $14,345
Up to $14,130
Up to $14,257
Up to $14,642
Up to $14,920
Up to $15,174
14,345 - 33,989
14,130-33,479
14,257 - 33,780
14,642-34,692
14,920-35,351
15,174-35,952
33,989-43,814
33,479-43,157
33,780 - 43,545
34,692-44,721
35,351 -45,571
35,952-46,346
43,814-54,225
43,157-53,412
43,545 - 53,893
44,721 -55,348
45,571 -56,400
46,346 - 57,359
54,225 - 64,050
53,412-63,089
53,893 - 63,657
55,348-65,376
56,400-66,618
57,359-67,751
64,050 - 999,999
63,089 - 999,999
63,657 - 999,999
65,376 - 999,999
66,618 - 340,000
67,751 -345,780
$1 million and over
$1 million and over
$ 1 million and over
$1 million and over
340,00 - 408,000
345,780-414,936
—
—
—
—
408,000 - 680,000
414,936-691,560
—
—
—
—
$680,000 and over
691,560-999,999
—
—
—
—
—
$1 million and over
2008 _
$ 55,197,062
$ 972,420,100
5.7%
2009 _
$ 45,482,726
$ 881,160,200
5.2%
2010 _
$ 43,884,798
$ 939,888,500
4.7%
2011 _
$ 51,691,153
$ 980,167,100
5.3%
2012 _
$ 54,442,733
$ 1,087,823,400
5.0%
2013 _
$ 66,220,132
$ 1,091,080,300
6 . 1 %
239
State of California Comprehensive Annual Financial Report
This page intentionally left blank
240
Debt Capacity
Debt capacity schedules contain information to help the reader understand the State’s outstanding
debt, the capacity to repay that debt, and the ability to issue additional debt in the future. This section
includes the following debt capacity schedules.
Schedule of Ratios of Outstanding Debt by Type
Schedule of Ratios of General Bonded Debt Outstanding
Schedule of General Obligation Bonds Outstanding
Schedule of Pledged Revenue Coverage
Sources: Unless otherwise noted, the information in the following schedules is derived from the State’s Comprehensive
Annual Financial Reports.
241
State of California Comprehensive Annual Financial Report
Schedule of Ratios of Outstanding Debt by Type
For the Past Ten Fiscal Years
(amounts in thousands, except per capita)
2005
2006
2007
2008
Governmental activities
General obligation bonds *.
. $ 45,541,417
$ 47,003,817
$ 50,269,442
$ 56,424,532
Revenue bonds ^.
. 8,068,980
7,300,638
8,009,784
7,811,832
Certificates of participation and
commercial paper.
. 752,013
923,890
1,358,051
1,736,089
Capital lease obligations ^.
. 3,918,560
4,466,828
4,346,179
4,376,410
Total governmental activities.
. 58,280,970
59,695,173
63,983,456
70,348,863
Business-type activities
General obligation bonds * .
Revenue bonds ^.
Certificates of participation and
commercial paper.
Capital lease obligations.
. 2,090,105
. 22,943,536
. 51,093
1,963,305
22,812,509
231,121
1,954,220
22,934,094
179,782
1,907,243
23,003,097
67,204
Total business-type activities.
. 25,084,734
25,006,935
25,068,096
24,977,544
Total primary government..
. $ 83,365,704
$ 84,702,108
$ 89,051,552
$ 95,326,407
Debt as a percentage of personal income .
. 6.4%
6.1%
6.0%
6.1%
Amount of debt per capita ^.. $
2,332 $
2,354 $
2,457 $
2,608
Note: Details regarding the State’s outstanding debt can be found in Notes 10 through 16 of the financial statements.
^ Prior to fiscal year 2008, net unamortized bond premiums and refunding gains/losses were not included. Beginning in fiscal year 2013,
refunding gains/losses are no longer included in bonds payable, but are shown as deferred inflows and deferred outflows of resources.
^ Prior to fiscal year 2014, the Public Buildings Construction Fund was included in business-type activities.
^ Prior to fiscal year 2014, governmental activities reported a capital lease obligtion to the Public Buildings Construction Fund. In fiscal year 2014,
the fund was reclassified from an enterprise fund to an internal service fund and the governmental activities' obligation and the fund's net
investment in direct financing leases were netted against each other within governmental activities.
^ Ratio calculated using personal income data shown on pages 252 and 253 for the prior calendar year.
^ Amount calculated using population data shown on pages 252 and 253 for the prior calendar year.
242
Statistical Section
2009
2010
$ 68,653,507
$ 77,745,789
7,767,855
7,611,939
1,407,908
1,342,119
4,456,039
4,967,290
82,285,309
91,667,137
1,702,377
1,477,663
23,053,114
24,538,094
51,307
64,518
24,806,798
26,080,275
$ 107,092,107
$ 117,747,412
6.7%
7.8%
$ 2,906 $ 3,176
2011
2012
$ 79,469,085
$ 81,060,111
7,511,092
7,421,198
1,335,340
46,098
4,882,233
5,176,341
93,197,750
93,703,748
1,218,639
1,118,634
23,290,315
24,790,918
139,974
67,325
791,489
817,687
25,440,417
26,794,564
$ 118,638,167
$ 120,498,312
7.6%
7.3%
$ 3,180 $ 3,207
2013
2014
$ 82,346,211
$ 83,276,347
7,735,053
18,917,443
538,593
598,094
5,319,487
260,088
95,939,344
103,051,972
887,053
674,192
25,558,129
12,989,916
77,560
204,647
909,871
1,250,274
27,432,613
15,119,029
$ 123,371,957
$ 118,171,001
7.0%
6.4%
$ 3,258 $ 3,096
243
State of California Comprehensive Annual Financial Report
Schedule of Ratios of General Bonded Debt Outstanding
For the Past Ten Fiscal Years
(amounts in thousands, except per capita)
2005
2006
2007
2008
Net general bonded debt
General obligation bonds *.
Economic Recovery bonds.
Less: restricted debt service fund.
. $ 36,735,442
. 10,896,080
$ 39,034,092
9,933,030
212,883
$ 43,234,702
8,988,960
792,841
$ 47,828,805
10,502,970
552,326
Net Economic Recovery bonds.
. 10,896,080
9,720,147
8,196,119
9,950,644
Net general bonded debt. .
. $ 47,631,522
$ 48,754,239
$ 51,430,821
$ 57,779,449
Net general bonded debt
as a percentage of personal income ^.
3.6%
3.5%
3.4%
3.7%
Amount of net general bonded debt per capita ^.
. $
1,332 $
1,355 $
1,419 $
1,581
Note: Details regarding the State’s general bonded debt outstanding can be found in Note 15 of the financial statements.
^ Prior to fiscal year 2008, net unamortized bond premiums and refunding gains/losses were not included. Beginning in fiscal year 2013,
refunding gains/losses are no longer included in bonds payable, but are shown as deferred inflows and deferred outflows of resources.
^ Ratio calculated using personal income data shown on pages 252 and 253 for the prior calendar year.
^ Amount calculated using population data shown on pages 252 and 253 for the prior calendar year.
244
Statistical Section
2009
2010
2011
2012
2013
2014
$
61,724,439
$
71,284,447
$
73,516,674
$
75,791,795
$
78,001,049
$
79,368,794
8,631,445
7,939,005
7,171,050
6,386,950
5,232,215
4,581,745
894
113,172
143,777
330,297
278,425
318,171
8,630,551
7,825,833
7,027,273
6,056,653
4,953,790
4,263,574
$
70,354,990
$
79,110,280
$
80,543,947
$
81,848,448
$
82,954,839
$
83,632,368
4.4%
5.2%
5.1%
5.0%
4.7%
4.5%
$
1,909 $
2,134 $
2,159 $
2,179 $
2,190 $
2,191
245
State of California Comprehensive Annual Financial Report
Schedule of General Obligation Bonds Outstanding
June 30,2014
(amounts in thousands)
Governmental activity
California Clean Water, Clean Air, Safe Neighborhood Parks and Coastal Protection. $ 2,181,915
California Library Construction and Renovation. 292,045
California Park and Recreational Facilities. 13,525
California Parklands. 2,960
California Safe Drinking Water. 59,340
California Stem Cell Research and Cures. 1,453,770
California Wildlife, Coastal, and Park Land Conservation. 124,555
Children’s Hospital. 1,201,280
Class Size Reduction Public Education Facilities.. 6,003,820
Clean Air and Transportation Improvement. 838,975
Clean Water. 11,255
Clean Water and Water Conservation. 4,820
Clean Water and Water Reclamation. 21,970
Community Parklands. 3,135
County Correctional Facility Capital Expenditure. 17,535
County Correctional Facility Capital Expenditure and Youth Facility. 79,935
Disaster Preparedness and Flood Prevention. 2,231,645
Earthquake Safety and Public Building Rehabilitation. 87,190
Economic Recovery. 4,581,745
Fish and Wildlife Habitat Enhancement. 5,395
Higher Education Facilities. 424,595
Highway Safety, Traffic Reduction, Air Quality, and Port Security. 13,248,140
Housing Emergency Shelter. 2,518,785
Housing and Homeless. 1,755
Kindergarten-University Public Education Facilities. 31,350,575
Lake Tahoe Acquisitions. 300
New Prison Construction. 42,890
Passenger Rail and Clean Air. 58,800
Public Education Facilities. 1,504,030
Safe, Clean, Reliable Water Supply. 578,960
Safe Drinking Water, Clean Water, Watershed Protection, and Flood Protection.. 1,444,740
Safe Drinking Water, Water Quality and Supply, Flood Control, River and Coastal Protection. 2,394,965
Safe Neighborhood Parks. 1,551,415
Safe, Reliable High-Speed Passenger Train. 623,705
School Building and Earthquake. 15,970
School Facilities. 1,195,840
Seismic Retrofit. 1,217,410
State, Urban, and Coastal Park. 4,305
Veterans’ Homes. 35,205
Voting Modernization. 36,305
Water Conservation. 24,245
Water Conservation and Water Quality. 34,940
Water Security, Clean Drinking Water, Coastal and Beach Protection. 2,771,185
Total governmental activity. 80,295,870
Bnsiness-type activity
California Water Resources Development. 241,835
Veterans Farm and Home Building. 433,645
Total business-type activity. 675,480
Totai outstanding generai obiigation bonds. 80,971,350
Unamortized bond premium. . 2,979,189
Total general obligation bonds payabie.. _$_ 83,950,539
Source: California State Treasurer’s Office
246
Schedule of Pledged Revenue Coverage
Statistical Section
For the Past Ten Fiscal Years
(amounts in thousands)
Net Revenue
Debt Service Requirements ^
Gross Operating Available for
June 30
Revenue *
Expenses ^
Debt Serviee
Prineipal
Interest
Total
Coverage
Housing Loans
2005
$ 121,063
$
27,687
$
93,376
$
90,970
$ 34,813
$
125,783
0.74
2006
127,733
25,654
102,079
25,715
34,949
60,664
1.68
2007
130,128
19,062
111,066
292,461
33,959
326,420
0.34
2008
130,139
21,263
108,876
56,225
33,333
89,558
1.22
2009
109,636
21,838
87,798
22,205
33,699
55,904
1.57
2010
85,321
16,404
68,917
111,085
34,874
145,959
0.47
2011
89,224
15,802
73,422
130,770
32,619
163,389
0.45
2012
84,830
20,322
64,508
88,105
24,914
113,019
0.57
2013
66,050
18,369
47,681
51,554
16,271
67,825
0.70
2014
65,247
19,452
45,795
47,620
14,926
62,546
0.73
Water Resources
2005
$ 750,282
$
501,225
$
249,057
$
56,645
$ 54,246
$
110,891
2.25
2006
949,691
721,541
228,150
55,461
49,785
105,246
2.17
2007
951,590
694,060
257,530
70,860
123,376
194,236
1.33
2008
989,275
773,362
215,913
100,945
114,213
215,158
1.00
2009
914,837
694,598
220,239
80,347
130,219
210,566
1.04
2010
1,042,843
837,459
205,384
97,360
124,296
221,656
0.93
2011
1,096,196
880,540
215,656
108,870
117,668
226,538
0.95
2012
1,045,812
852,404
193,408
116,150
121,804
237,954
0.81
2013
1,127,195
822,637
304,558
124,155
145,660
269,815
1.13
2014
973,508
798,653
174,855
114,775
107,727
222,502
0.78
Water Pollution
2005
$ 55,218
$
4,082
$
51,136
$
21,425
$ 10,424
$
31,849
1.61
Control
2006
64,740
10,615
54,125
22,185
9,812
31,997
1.69
2007
78,564
3,387
75,177
22,850
9,178
32,028
2.35
2008
71,404
4,521
66,883
23,585
8,422
32,007
2.09
2009
59,923
4,416
55,507
22,930
7,747
30,677
1.80
2010
53,365
9,880
43,485
23,655
6,928
30,583
1.42
2011
49,585
4,876
44,709
24,390
5,996
30,386
1.47
2012
50,183
2,849
47,334
24,285
4,984
29,269
1.62
2013
51,642
1,055
50,587
45,755
533
46,288
1.09
2014
54,968
1,739
53,229
13,000
355
13,355
3.99
(continued)
Source: California State Controllers’s Office
1 Total gross revenue includes non-operating interest revenue. Building authorities' revenue includes operating transfers in. The nature of the revenue
pledged for each type of debt is as follows: investment and interest earnings for Housing Loans bonds and Water Pollution Control bonds; charges
for services and sales for Water Resources bonds; power sales revenue for Electric Power bonds; rental revenue for Public Buildings Contruction
bonds, High Technology Education bonds, CSU Channel Island Financing Authority bonds, and building authorities bonds; residence fees for
California State University bonds; tobacco settlements and investment earnings for the Golden State Tobacco Securitization Corporation bonds; and
federal transportation funds for Grant Anticipation Revenue Vehicles.
2 Total operating expenses are exclusive of depreciation, interest expense, and amortization (recovery) of long-term prepaid charges. Prior to fiscal
year 2012, bond issuance costs were amortized over the term of the bond. Beginning fiscal year 2012, bond issuance costs are operating expenses in
the fiscal year incurred.
2 Debt service requirements include principal and interest of revenue bonds.
All revenue bonds have been redeemed.
^ In fiscal year 2011, the California State University Fund was reclassified from a governmental fund to an enterprise fund.
6 Federal transportation funds are the only source of state revenue to pay these bonds, and the state obligation to pay debt service on these bonds is
limited to and dependent on receipt of the federal funds.
247
State of California Comprehensive Annual Financial Report
Schedule of Pledged Revenue Coverage (continued)
For the Past Ten Fiscal Years
(amounts in thousands)
Net Revenue _ Debt Service Requirements ^
June 30
Gross
Revenue *
Operating
Expenses ^
Available for
Debt Service
Principal
Interest
Total Coverage
Electric Power
2005
$ 5,655,000
$4,714,000
$ 941,000
$
388,000
$
480,000
$
868,000
1.08
2006
5,342,000
4,370,000
972,000
436,000
466,000
902,000
1.08
2007
5,865,000
4,843,000
1,022,000
447,000
448,000
895,000
1.14
2008
5,362,000
4,323,000
1,039,000
470,000
447,000
917,000
1.13
2009
4,560,000
3,604,000
956,000
493,000
399,000
892,000
1.07
2010
3,908,000
3,007,000
901,000
518,000
373,000
891,000
1.01
2011
2,317,000
1,427,000
890,000
460,000
344,000
804,000
1.11
2012
915,000
29,000
886,000
556,000
354,000
910,000
0.97
2013
488,000
(408,000)
896,000
574,000
341,000
915,000
0.98
2014
835,000
(46,000)
881,000
611,000
312,000
923,000
0.95
Public Buildings
2005
$ 315,718
$ 13,837
$ 301,881
$
290,210
$
279,474
$
569,684
0.53
Construction
2006
384,442
9,832
374,610
332,345
318,098
650,443
0.58
2007
396,895
3,699
393,196
365,953
324,246
690,199
0.57
2008
384,816
33,566
351,250
342,582
331,355
673,937
0.52
2009
366,151
78,489
287,662
360,559
335,248
695,807
0.41
2010
430,069
120,565
309,504
377,998
367,055
745,053
0.42
2011
423,775
507
423,268
394,490
383,185
777,675
0.54
2012
426,960
13,211
413,749
405,585
384,400
789,985
0.52
2013
616,041
13,479
602,562
554,985
395,073
950,058
0.63
2014
431,890
14,403
417,487
412,085
439,888
851,973
0.49
High Technology
2005
$ 36,737
$ 3,107
$ 33,630
$
37,060
$
30,387
$
67,447
0.50
Education ^
2006
26,508
2,489
24,019
36,910
19,422
56,332
0.43
2007
22,966
1,514
21,452
25,624
21,062
46,686
0.46
2008
20,600
3,511
17,089
22,265
13,344
35,609
0.48
2009
15,975
3,837
12,138
36,730
11,704
48,434
0.25
2010
13,015
5,009
8,006
19,665
9,977
29,642
0.27
2011
10,498
681
9,817
19,995
8,878
28,873
0.34
2012
8,452
—
8,452
21,105
7,754
28,859
0.29
2013
5,585
—
5,585
22,275
6,568
28,843
0.19
2014
424
—
424
24,771
847
25,618
0.02
California State
2005
$ 395,396
$ 302,275
$ 93,121
$
90,025
$
52,696
$
142,721
0.65
University ^
2006
512,231
303,261
208,970
109,354
91,876
201,230
1.04
2007
554,851
689,223
(134,372)
99,598
31,149
130,747
(1.03)
2008
640,209
511,895
128,314
105,229
115,928
221,157
0.58
2009
811,454
261,628
549,826
43,572
129,238
172,810
3.18
2010
599,572
577,765
21,807
47,815
151,988
199,803
0.11
2011
3,722,414
5,455,059
(1,732,645)
56,344
172,231
228,575
(7.58)
2012
4,165,118
5,770,880
(1,605,762)
138,535
174,914
313,449
(5.12)
2013
4,215,258
5,754,800
(1,539,542)
99,340
181,969
281,309
(5.47)
2014
4,505,589
6,376,502
(1,870,913)
89,453
173,424
262,877
(7.11)
248
Statistical Section
June 30
Gross
Revenue '
Operating
Expenses ^
Net Revenue
Available for
Debt Service
Debt Service Requirements ^
Principal Interest Total
Coverage
CSU Channel
2005
$
8,149
$
10
$
8,139
$
- $
5,541
$
5,541
1.47
Island Financing
2006
8,377
11
8,366
—
6,123
6,123
1.37
Authority ^
2007
7,397
8
7,389
—
6,951
6,951
1.06
2008
245
13
232
—
556
556
0.42
Building
2005
$
86,624
$
_
$
86,624
$
42,296 $
38,994
$
81,290
1.07
Authorities
2006
94,985
—
94,985
43,862
81,253
125,115
0.76
2007
81,342
68
81,274
45,437
29,228
74,665
1.09
2008
79,077
68
79,009
47,475
27,260
74,735
1.06
2009
78,733
68
78,665
48,594
25,028
73,622
1.07
2010
76,535
—
76,535
50,948
34,058
85,006
0.90
2011
63,168
—
63,168
51,957
20,071
72,028
0.88
2012
57,386
—
57,386
36,473
22,889
59,362
0.97
2013
53,441
—
53,441
38,400
18,390
56,790
0.94
2014
53,157
—
53,157
39,895
29,882
69,777
0.76
Golden State
2005
$
427,159
$
305
$
426,854
$
55,500 $
330,652
$
386,152
1.11
Tobacco
2006
396,987
—
396,987
61,320
307,824
369,144
1.08
Securitization
2007
413,246
—
413,246
133,555
276,965
410,520
1.01
Corporation
2008
445,097
—
445,097
129,120
326,631
455,751
0.98
2009
493,448
—
493,448
116,960
320,679
437,639
1.12
2010
393,487
—
393,487
138,260
316,038
454,298
0.87
2011
361,974
—
361,974
60,230
315,268
375,498
0.96
2012
368,853
—
368,853
65,765
312,815
378,580
0.97
2013
555,392
—
555,392
623,510
308,056
931,566
0.60
2014
355,918
—
355,918
50,910
325,884
376,794
0.94
Toll Bridge
Seismic Retrofit ^
2005
$
131,791
$
97,386 $
34,405
$
$
28,615
$
28,615
1.20
Grant Anticipation
2005
$
65,134
$
— $
65,134
$
41,545
$
23,589
$
65,134
1.00
Revenue Vehicles ^
2006
72,338
—
72,338
47,845
24,493
72,338
1.00
2007
72,149
—
72,149
49,190
22,959
72,149
1.00
2008
71,945
—
71,945
50,985
20,960
71,945
1.00
2009
77,193
—
77,193
55,275
21,918
77,193
1.00
2010
83,272
—
83,272
62,335
20,937
83,272
1.00
2011
84,294
—
84,294
64,785
19,509
84,294
1.00
2012
84,290
—
84,290
67,730
16,560
84,290
1.00
2013
84,296
—
84,296
70,990
13,306
84,296
1.00
2014
84,289
—
84,289
74,400
9,889
84,289
1.00
(concluded)
249
State of California Comprehensive Annual Financial Report
This page intentionally left blank
250
Demographic and Economic
Information
The demographic and economic schedules contain trend information to help the reader understand the
environment in which the State’s financial activities occur. This section includes the following
demographic and economic schedules.
Schedule of Demographic and Economic Indicators
Schedule of Employment by Industry
251
State of California Comprehensive Annual Financial Report
Schedule of Demographic and Economic Indicators
For the Past Ten Calendar Years
Population (in thousands)
California *.
% Change.
United States *.
% Change.
Total personal income (in millions)
California. $
% Change.
United States. $
% Change.
Per capita personal income
California ^. $
% Change.
United States ^. $
% Change.
Labor force and employment (in thousands)
California
Civilian labor force.
Employed.
Unemployed.
Unemployment rate.
United States employment rate .
2004
2005
2006
2007
35,753
35,986
36,247
36,553
1.0%
0.7%
0.7%
0.8%
293,046
295,753
298,593
301,580
0.9%
0.9%
1.0%
1.0%
1,312,227
$
1,387,661
$
1,495,533
$
1,566,400
6.4%
5.7%
7.8%
4.7%
9,928,790
$
10,476,669
$
11,256,516
$
11,900,562
6.0%
5.5%
7.4%
5.7%
36,703 $
38,561 $
41,259 $
42,853
5.3%
5.1%
7.0%
3.9%
33,881 $
35,424 $
37,699 $
39,461
5.0%
4.6%
6.4%
4.7%
17,444
17,545
17,687
17,921
16,355
16,592
16,821
16,961
1,090
953
865
960
6.2%
5.4%
4.9%
5.4%
5.5%
5.1%
4.6%
4.6%
Source: Economic Research Unit, California Department of Finance; Bureau of Economic Analysis, United States
Department of Commerce; Labor Market Information Division, California Employment Development
Department; Bureau of Labor Statistics, United States Department of Labor.
* Some prior years were updated based on more current infonnation.
^ Calculated by dividing total personal income by population.
252
Statistical Section
2008
2009
2010
2011
2012
2013
36,856
37,077
37,309
37,570
37,867
38,164
0.8%
0.6%
0.6%
0.7%
0.8%
0.8%
304,375
307,007
309,326
311,583
313,874
316,129
0.9%
0.9%
0.8%
0.7%
0.7%
0.7%
$
1,610,698
$
1,516,677
$
1,564,209
$
1,645,138
$
1,768,039
$
1,856,614
2.8%
(5.8%)
3.1%
5.2%
7.5%
5.0%
$
12,451,660
$
11,852,715
$
12,308,496
$
12,949,905
$
13,729,063
$
14,151,427
4.6%
(4.8%)
3.8%
5.2%
6.0%
3.1%
$
43,702 $
40,906 $
41,926 $
43,789 $
46,477
$
48,434
2.0%
(6.4%)
2.5%
4.4%
6.1%
4.2%
$
40,909 $
38,607 $
39,791 $
41,560 $
43,735
$
44,765
3.7%
(5.6%)
3.1%
4.4%
5.2%
2.4%
18,203
18,208
18,316
18,385
18,511
18,573
16,890
16,145
16,052
16,227
16,740
17,044
1,313
2,064
2,265
2,158
1,771
1,530
7.2%
11.3%
12.4%
11.7%
9.6%
8.2%
5.8%
9.3%
9.6%
8.9%
8.1%
7.4%
253
State of California Comprehensive Annual Financial Report
Schedule of Employment by Industry
For Calendar Years 2004 and 2013
2004
2013
Percent
Percent
of Total State
of Total State
Employees Employment
Employees Employment
Industry
Services.
. 5,798,400
38.3 %
6,824,500
43.7
%
Government
Federal.
. 195,400
1.3
185,400
1.2
Military.
. 55,600
0.4
60,100
0.4
State and Local.
2,146,700
14.2
2,124,600
13.7
Retail trade.
. 1,617,800
10.7
1,601,400
10.3
Manufacturing.
. 1,523,400
10.1
1,250,900
8.0
Information, finance, and insurance.
1,101,200
7.3
974,300
6.3
Construction and utilities.
. 906,500
6.0
695,200
4.5
Wholesale trade.
653,000
4.3
697,400
4.5
Transportation and warehousing.
. 426,700
2.8
444,700
2.9
Farming.
. 386,400
2.6
411,400
2.6
Real estate.
. 276,400
1.8
258,400
1.7
Natural resources and mining.
. 22,800
0.2
30,600
0.2
Total .
. 15,110,300
100.0 %
15,558,900
100.0
%
Source: Labor Market Information Division, California Employment Development Department
254
Operating Information
The operating information schedules assist the reader in evaluating the size, efficiency, and
effectiveness of the State’s government. This section includes the following operating information
schedules.
Schedule of Full-time Equivalent State Employees by Function
Schedule of Operating Indicators by Function
Schedule of Capital Asset Statistics by Function
255
State of California Comprehensive Annual Financial Report
Schedule of Full-Time Equivalent
State Employees by Function
For the Past Ten Fiscal Years
Health
State and
Business,
General
and Human
Consumer
Transportation,
Correctional
Government
Education
Services
Resources
Serviees
and Housing
Programs
Total
Fiscal Year
2005
19,884
119,162
50,490
18,935
15,023
41,450
48,740
313,684
2006
20,336
121,973
49,569
19,076
15,126
41,342
50,171
317,593
2007
21,035
134,974
49,533
19,677
15,530
41,314
53,321
335,384
2008
21,825
134,832
49,330
20,868
15,840
42,139
58,284
343,118
2009
22,347
135,720
50,996
21,985
16,350
42,254
60,957
350,609
2010
30,390
133,642
43,663
22,223
15,868
40,590
59,401
345,777
2011
32,535
138,017
48,638
23,611
17,043
44,844
67,272
371,960
Business, *
Health
Consumer
General *
and Human
Services,
Correctional
Government
Education
Services
Resources
and Housing
Transportation *
Programs
Total
Fiscal Year
2012
44,673
131,039
46,431
24,199
6,236
41,758
62,472
356,808
2013^
43,241
132,492
43,431
23,796
5,395
39,222
58,742
346,319
2014
43,858
136,244
44,343
24,156
5,409
39,015
60,871
353,896
Source: Annual Governor’s Budget Summary, California Department of Finance
Note: The number of full-time equivalent employees is calculated by counting each person who works full time as one full-time
equivalent and those who work part time as fractional equivalents based on time worked.
1 Effective July 1, 2013, under the Governor’s 2012 Reorganization Plan No. 2, a significant reorganization took place that impacted previously
reported functions. The Government Operations Agency, including but not limited to Franchise Tax Board, Department of General Services, and
the Public Employees’ Retirement System, was created and added to the General Government function. Also, the business and housing
components under the previously reported Business, Transportation, and Housing function merged with the State and Consumer Services function
and the remaining transportation components now comprise the Transportation Agency. Information reported under the new functions are not
comparable to that of prior years.
^ Some amounts were updated based on more current information.
256
Statistical Section
This page intentionally left blank
257
State of California Comprehensive Annual Financial Report
Schedule of Operating Indicators by Function
For the Past Ten Fiscal Years
2005 2006 2007 2008
General Government
State Lottery
Total revenue *.
. $ 3,334 $
3,585 $
3,318 $
3,050
Allocation to Education Fund *.
. $ 1,149 $
1,259 $
1,177 $
1,069
Judicial Council of California
Supreme Court ***
Cases filed.
. 8,990
9,261
8,988
10,521
Cases disposed.
. 8,535
9,878
9,247
10,440
Courts of Appeal
Notices of appeal filed
Civil.
. 6,142
6,018
6,116
5,913
Criminal.
. 6,312
6,516
6,508
6,681
Juvenile.
. 2,626
2,715
2,880
2,900
Trial Courts
Total civil cases
Filings.
. 1,426,822
1,418,722
1,462,820
1,582,092
Dispositions.
. 1,304,924
1,267,534
1,286,736
1,280,184
Department of Food and Agriculture
Milk production (million lbs.) ***.
. 37,564
38,830
40,683
41,203
Farm land (thousand acres) .
. 25,900
25,700
25,400
25,400
Education
Public Colleges and Universities
Fall enrollment
Community Colleges .
. 1,607,458
1,644,104
1,723,782
1,823,736
California State University.
. 405,282
417,156
433,017
437,008
University of California .
. 209,080
214,298
220,034
226,040
K-i2 Schools
Fall enrollment
Public.
. 6,322,217
6,312,103
6,286,943
6,275,469
Private.
. 591,056
594,597
583,794
564,734
Source: California State Lottery; Judicial Council of California; U.S. Department of Agriculture, National Agricultural Statistics
Service; California Departments of the California Highway Patrol, Finance, Fish and Wildlife, Education, Public Health,
Motor Vehicles, Transportation, and Corrections and Rehabilitation; Employment Development Department; California
Energy Commission; and Franchise Tax Board.
^ Dollars in millions.
^ Includes death penalty cases, habeas related to automatic appeals, petitions for review, original proceedings, and State Bar matters.
^ Includes only one notice of appeal per case.
^ Includes personal injury, property damage, wrongful death, small claims, family law, probate, and other cases.
^ Data based on calendar year.
^ Total nonfarm and farm.
^ Items reported by license year as of December 2014.
^ Data compiled from a 10% sample of California licensed drivers.
^ A center-line mile is measured by the yellow dividing strip that runs down the middle of the road, regardless of the number of lanes on each side.
Some prior years were updated based on more current infonnation.
Projected
N/A=Not available
258
Statistical Section
2009 2010 2011
$ 2,955 $ 3,041 $ 3,439
$ 1,028 $ 1,072 $ 1,103
9,274
9,562
10,145
9,513
9,439
10,063
5,958
6,122
6,258
6,819
6,857
6,877
2,858
2,759
2,106
1,729,648
1,647,817
1,574,569
1,537,243
1,530,502
1,599,388
39,512
40,385
41,462
25,400
25,400
25,400
1,822,839
1,747,236
1,655,077
433,054
412,372
426,534
231,853
234,464
236,691
6,252,011
6,190,425
6,217,002
536,393
531,111
515,143
2012
2013
2014
4,371
$
4,446
$
5,035
1,300
$
1,262
$
1,328
9,237
7,813
N/A
9,739
8,269
N/A
6,505
6,052
N/A
6,387
6,004
N/A
2,830
2,713
N/A
1,454,810
1,352,964
N/A
1,432,231
1,322,639
N/A
41,801
41,256
N/A
25,600
25,500
N/A
1,582,308
1,582,443
N/A
436,560
446,530
N/A
238,686
244,126
N/A
6,220,993
6,226,989
6,236,672
497,019
516,119
511,286
(continued)
259
State of California Comprehensive Annual Financial Report
Schedule of Operating Indicators by Function (continued)
For the Past Ten Fiscal Years
2005
2006
2007
2008
Health and Human Services
Department of Public Health
Vital statistics
Live births .
548,700
562,157
566,137
551,567
Department of Social Services
Total Food Stamp households (avg. per month).
792,617
809,782
823,335
892,992
Employment Development Department
Number of employed .
15,440,600
15,613,300
15,691,100
15,142,000
Resources
Department of Fish and Wildlife
Sport fishing licenses sold ***.
2,870,727
2,924,325
3,003,783
2,857,236
Hunting licenses sold .
1,625,078
1,655,760
1,718,657
1,670,190
California Energy Commission
Electrical energy generation
plus net imports (gigawatt hours) ***.
289,177
298,454
304,823
307,448
state and Consumer Services
Franchise Tax Board
Personal Income Tax
Number of tax returns filed.
Taxable income *.
. $
14,087,896
767,877
$
14,382,677
812,008
$
15,016,273
872,869
$
14,806,335
799,490
Total tax liability *.
Corporation Tax ^
. $
43,131
$
45,716
$
49,693
$
41,676
Number of tax returns filed.
651,060
115,474
684,363
140,325
709,937
121,843
722,358
67,921
Income reported for taxation *.
.... $
$
$
$
Total tax liability *.
.... $
8,680
$
9,992
$
9,414
$
9,106
Business and Transportation
Department of Motor Vehicles
Motor vehicle registration .
License issued by age *
33,363,963
33,882,029
32,047,124
31,920,649
Under age 18.
277,168
268,199
262,415
244,481
Between 18-80.
22,155,604
22,450,786
22,804,927
22,922,361
Over age 80.
494,577
518,102
562,518
552,150
California Highway Patrol
Total number of DUI arrests ***.
89,946
94,251
92,270
97,019
Department of Transportation
Highway center-line miles — rural ^.
11,090
4,123
10,821
4,422
10,830
4,439
10,811
4,393
Highway center-line miles — urban ^..
Correctional Programs
Department of Corrections and Rehabilitation
Division of Adult Institutions
Institution population at December 31 each year.
Division of Juvenile Justice
166,723
171,310
170,452
170,283
Institution population at June 30 each year.
3,348
2,962
2,531
1,877
260
Statistical Section
2009
2010
526,774
509,979
1,067,358
1,340,857
14,326,300
14,476,400
2,838,776
1,679,864
2,410,008
1,677,864
299,101
291,310
2011
2012
502,023
503,788
1,576,042
1,757,387
14,614,600
15,240,400
2,483,680
1,863,200
2,580,762
1,988,753
293,875
302,113
2013 2014
494,390
500,748 “
1,898,283
2,004,016
16,109,200
N/A
2,539,244
2,485,293
2,032,792
1,912,151
296,569
N/A
$
$
$
$
14,638,204
14,814,427
15,042,359
15,152,800
15,487,100
N/A
729,658
$
794,758
$
838,347
$
948,523
$
949,655
N/A
38,870
$
44,472
$
43,921
$
58,652
$
55,679
N/A
727,675
738,224
754,315
784,086
N/A
N/A
55,367
$
96,965
$
93,456
$
96,772
N/A
N/A
7,858
$
8,604
$
7,808
$
6,921
N/A
N/A
31,799,398
31,987,821
31,802,483
31,946,422
32,903,847
N/A
229,545
218,997
227,069
224,809
221,385
N/A
22,910,011
23,001,119
23,150,222
23,462,971
23,824,697
N/A
560,491
579,397
579,207
602,508
597,350
N/A
95,135
89,814
86,901
79,993
76,860
N/A
10,808
10,785
10,780
10,784
10,315
N/A
4,384
4,375
4,353
4,363
4,789
N/A
167,922
162,200
147,181
132,768
134,333
134,431
1,589
1,474
1,263
922
712
675
(concluded)
261
State of California Comprehensive Annual Financial Report
Schedule of Capital Asset Statistics by Function
For the Past Ten Fiscal Years
2005
2006
2007
2008
General Government
Department of Food and Agriculture
Vehicles and mobile equipment .
903
907
915
818
Square footage of structures (in thousands).
467
453
453
453
Department of Justice
Vehicles and mobile equipment.
969
968
966
826
Department of Military
Vehicles and mobile equipment.
152
210
182
206
Square footage of structures (in thousands).
3,348
3,388
3,388
3,387
Department of Veterans Affairs
Veterans homes.
3
3
3
3
Vehicles and mobile equipment.
139
111
248
251
Square footage of structures (in thousands).
1,598
1,598
1,598
1,598
Education
California State University
Vehicles and mobile equipment ’ .
N/A
601
3,343
3,994
Campuses.
23
23
23
23
Square footage of structures (in thousands).
59,588
59,921
62,198
63,971
Health and Human Services
Department of Developmental Services
Vehicles and mobile equipment.
836
655
829
839
Developmental centers.
7
7
7
7
Square footage of structures (in thousands).
5,185
5,181
5,181
5,186
Department of State Hospitals ^
Vehicles and mobile equipment.
439
655
629
638
State hospitals.
4
5
5
5
Square footage of structures (in thousands).
4,626
4,673
6,359
6,364
Sources: California Department of General Services (DGS)
^ For fiscal year 2008, DGS was not able to obtain complete data from the agency.
^ Prior to fiscal year 2006, DGS did not require California State University to report its vehicles.
^ In fiscal year 2012, portions of the Department of Mental Health became the Department of State Hospitals.
^ In fiscal year 2008, California Highway Patrol purchased numerous vehicles, and in their physical count also included motorcycles, which had not
been reported for previous years.
^ In fiscal year 2006, Department of Corrections and Rehabilitation merged with Department of Youth Authority.
N/A = not available
262
Statistical Section
2009 2010 2011 2012 2013 2014
803
746
809
466
466
466
870
816
677
182
208
249
3,383
3,154
3,530
5
6
6
120
113
132
1,683
1,600
2,086
4,015
4,338
4,415
23
23
23
66,686
69,049
71,287
701
569
818
7
5
5
5,187
5,185
5,294
658
665
709
5
5
5
6,348
6,331
6,331
804
792
747
466
455
455
531
527
520
233
211
211
3,511
3,623
4,019
6
8
8
143
267
285
2,086
2,488
2,543
4,415
4,466
4,619
23
23
23
73,785
73,866
73,316
789
632
424
5
4
4
5,294
5,279
5,308
718
699
886
5
7
7
6,336
6,457
6,460
(continued)
263
State of California Comprehensive Annual Financial Report
Schedule of Capital Asset Statistics by Function (continued)
For the Past Ten Fiscal Years
Resources
Department of Fish and Wildlife
Vehicles and mobile equipment.
Square footage of structures (in thousands).
Department of Forestry and Fire
Vehicles and mobile equipment.
Square footage of structures (in thousands).
Department of Parks and Recreation
Vehicles and mobile equipment.
State Parks.
Acres of state park land (in thousands).
Square footage of structures (in thousands).
State Lands Commission
Vehicles and mobile equipment.
Acres of land (in thousands).
State and Consumer Services
Department of Consumer Affairs
Vehicles and mobile equipment.
Department of General Services
Vehicles and mobile equipment.
Square footage of structures (in thousands).
Business and Transportation
California Highway Patrol
Vehicles and mobile equipment ^.
Square footage of structures (in thousands).
Department of Motor Vehicles
Vehicles and mobile equipment.
Square footage of structures (in thousands)
Department of Transportation
Vehicles and mobile equipment.
Square footage of structures (in thousands).
Correctional Programs
Department of Corrections and Rehabilitation
Vehicles and mobile equipment *.
Prisons and juvenile facilities ^.
Square footage of structures (in thousands).
2005 2006 2007 2008
3,157
3,182
3,311
2,868
1,108
1,112
1,120
1,192
3,016
2,572
2,945
3,043
3,892
3,885
3,883
3,869
3,044
2,742
2,988
3,023
278
278
276
279
1,506
1,552
1,235
1,248
6,348
6,350
6,350
6,350
56
49
51
49
4,498
4,496
4,492
4,491
628
1,050
640
726
6,883
6,894
7,330
7,558
15,995
17,350
18,084
18,084
3,930
4,105
4,655
5,228
1,147
1,087
1,110
1,118
395
373
458
434
1,853
1,827
1,866
1,848
10,856
11,048
11,130
11,098
6,284
6,632
6,618
6,229
7,006
6,451
6,657
7,908
32
32
41
41
•0,472
40,622
40,777
40,831
264
Statistical Section
2009
2010
2011
2012
2013
2014
3,640
2,630
3,180
3,012
2,896
2,954
1,269
1,301
1,313
1,317
1,317
1,311
3,067
2,598
2,804
2,810
2,845
2,748
3,851
3,947
3,943
3,935
3,641
3,632
3,220
3,102
3,715
4,200
3,311
3,489
278
278
279
280
280
279
1,331
1,365
1,334
1,333
1,590
1,590
6,350
6,350
6,433
6,623
6,598
6,751
57
47
50
42
42
41
4,491
4,491
4,491
4,491
4,489
4,489
718
574
578
574
518
554
6,736
5,761
5,670
4,991
5,226
5,053
18,084
18,394
18,602
19,180
19,098
19,367
5,914
5,422
5,337
5,013
5,341
5,170
1,118
1,135
1,135
1,149
1,149
1,166
417
366
366
366
294
295
1,855
1,855
1,842
1,842
1,842
1,845
13,346
11,302
12,759
12,690
11,767
11,596
6,434
6,444
6,519
8,131
8,170
7,960
7,778
5,787
5,985
5,952
5,156
5,137
39
39
39
39
37
37
•0,852
41,228
41,399
41,399
40,606
40,726
(concluded)
265
Acknowledgements
STATE OF CALIFORNIA
Office of the State Controller
BETTY T. YEE
California State Controller
Executive Office
Karen Greene-Ross
Chief of Staff
George Lolas
Chief Operating Officer
Division of Accounting and Reporting
Casandra Moore-Hudnall, CPA
Division Chief
Liz Cornell, CPA
Assistant Division Chief
State Government Reporting Financiai Information Systems
and Technoiogy
Bureau Chief
Technicai Advisor
Carlos Diaz
Managers
Juliaime Talbot
Bureau Chief
Steven Taketa
Renee Davenport
Dana Parker
Emmanuel Lasu
Supervisors
Saleshni Singh
Supervisor
Rod Renteria
Silvia Kalman
Staff
Sharon Wurst
Staff
Barbara Beck, CPA
Bing Feng
Ross Boyer
Perry Darden
Cecilia Ei-Szeto
Earry Butler
Janet Delorey
TuongKhanh Nguyen
Daniel Castro
Godwin Ekine
Allen Nunley
Matt Harada
Judy Eng
Marissa Parris
Marcelino Hernandez
Erica Fernandez
Randy Phan
Patrick Mocettini
Jim Graham
Teri Quinlan, CPA
Jason Kronemeyer
Matthew Haber
Samprit Shergill, CPA
Eric Pecoraro
Robert Holpuch
Corrie Smithers
Kitipong Punnikul
Jermy Jones
Janti Tam
Miguel Quistian
Eilian Ee
Randall Taylor
Shamal Siwan
Grace Fee
Scott Taylor, CPA
Carl Walker
Judy Fee
Sang Choi Thompson
Thomas Wong
Edlene Feathers
Will EeMarQuand
Perry Tseng-Eiu
Editors
Terrie Chrysler
Speciai Thanks
Estelle Manticas
Alan Davis
Gary Marshall
Teresa Moraga
Yolanda Green
Sheri Noss
Dee Ranaweera, CPA
BETTY T. YEE
Office of California State Controller
Division of Accounting and Reporting
P.O. Box 942850
Sacramento, CA 94250
(916) 445-2636
www.sco.ca.gov
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